The European Union will launch an antitrust investigation against Apple in the near future. According to a few reliable sources, it is said that EU’s competition commissioners are considering Spotify’s complaint against Apple regarding App Store Policies through which Spotify is unfairly hindered. The investigation is likely to start in the next few weeks.
In March 2019, Spotify reached out to the EU to lodge a complaint against Apple for its unfair policies. Spotify asked apple to “Play Fair” and let their application have a fair chance. They’ve released a YouTube video and a dedicated website explaining the same.
The two tech companies haven’t responded about the report of a formal investigation against Apple. However, in the past, Apple released a statement rejecting Spotify’s assertions while arguing that Spotify is driven by financial motivations and wanted to benefit from App Store’s infrastructure without contributing to it.
“Spotify has every right to determine their own business model, but we feel an obligation to respond when Spotify wraps its financial motivations in misleading rhetoric about who we are, what we’ve built and what we do to support independent developers, musicians, songwriters and creators of all stripes,” says Apple about Spotify in an official response.
One of the biggest concerns of Spotify regarding the App Store was the 30% cut (for the first year and 15% from the second) charged by Apple from Spotify’s subscription fee. On top of this, Spotify was restricted from steering customers to any other website from which they could subscribe. That left Spotify no other option but to abide by App Store’s policies and pay the hefty cut. But doing so massively decreased Spotify’s profits and pushed it into hiking the prices for Premium subscription.
After Spotify raises its premium subscription fee, Apple acquires Beats and launches the Apple Music at a subscription fee similar to Spotify’s old premium subscription fee.
Apart from an outrageous cut from the subscription fee, Spotify also faced several other issues such as a prolonged battles with Apple for integrating Spotify with iWatch and HomePod. While Apple integrated Spotify with Apple Watch, it didn’t integrate it in HomePod and also rejected Spotify’s appeals for podcast recommendations and so on. After years of discourse regarding several policies, subscription cuts and app-integrations, Spotify finally reached out to the EU.
It is unclear whether Spotify would particularly profit or benefit from the antitrust investigation by EU on Apple. However, a victory for Spotify would significantly affect Apple and might steer the company towards reducing the subscription cut or eliminating it completely. It may also push Apple into working more closely with third-party media services as well.
While this might sound very liberating for the users, it might however eat into Apple’s most important service revenue and force it to rely solely on money from music, news and video offerings.