EU regulators have reportedly sided against Apple in its long fight against Spotify over App Store policies. The complaint centered on "anti-steering" rules that allegedly prevented platforms like Spotify from adequately promoting alternative methods of payment. While Spotify was the key opposition, the decision impacts not just music-streaming, but anyone offering software that requires a monthly subscription.
Bloomberg reports that regulators are still putting the final touches on the ruling, with a formal decision expected for early next year. Along with the ruling, the EU will likely penalize Apple for the practice and ban it outright. It’s expected that Apple will get hit with a steep fine, with some experts suggesting it could be as much as ten percent of its annual global revenue. This could add up to nearly $40 billion.
However, the fine is likely to be lower than that, as the EU tends to place more of an emphasis on actually ending abusive practices, instead of relying solely on fines as a deterrent. So the big news will be Apple being forced to play by the rules when operating in Europe, ending anti-steering practices once and for all. Of course, it’s all up in the air until the regulating body releases its judgment.
This follows a probe that started four years ago. It all began with a complaint from Spotify alleging that Apple’s anti-steering practices were forcing the music-streaming platform to raise prices to cover costs associated with appearing on the App Store. This led to an initial “statement of objections” against Apple in 2021 and a formal charge sheet this past February, as reported by The Verge.
The formal charge sheet declared in a “preliminary view” that “Apple’s anti-steering obligations” offer “unfair trading conditions.” For years, Apple didn’t allow rival streaming services like Spotify to even include links in third-party apps to their own subscription sign-ups. The company has since loosened this restriction slightly after an antitrust investigation in Japan. The EU ruling could further erode this mandate.
The European regulatory commission will address the accusation that Apple stopped companies from advertising alternative subscription methods but will not address anything related to in-app purchases. If you’ve been following this story, fees associated with in-app purchases were also part of the complaint until being dropped in February. The EU has issued a separate probe into Apple’s tap-to-pay technology and whether there are any inherent antitrust concerns. According to reports, the company’s in talks to settle that case.
How will this affect the rest of the world? There’s a similar case making its way through the US courts, via an antitrust suit brought forth by Epic Games. A judge sided with Epic, but Apple recently asked the Supreme Court for an appeal. The court granted a temporary reprieve, so Apple can still do whatever it wants in its App Store, for now. Apple is a global entity, however, so all it takes is a few countries to force a company-wide change. As an example, just look at USB-C ports.
Google faced a different outcome in a US court this week. A federal jury sided with Epic Games in a similar antitrust case against Google. The jury unanimously agreed that Google held an illegal monopoly on app distribution and in-app billing services for Android devices.
This article originally appeared on Engadget at https://www.engadget.com/the-eu-will-reportedly-rule-against-apple-in-spotifys-complaint-over-app-store-policies-195704039.html?src=rss