# Apple reveals latest details concerning Spotify’s business amidst forthcoming EU fine
With the European Commission set to rule on Spotify’s complaint about competition in the streaming music market, there are indications that the ruling will not be in Apple’s favor. The Financial Times reported that the EC will impose its first-ever fine against the tech giant for allegedly violating EU law over competition in the streaming music market. The expected fine is around €500 million (approximately $539 million USD), as noted in the report.
Instead of considering the fine as part of the cost of doing business, Apple, a company that made history as the first to be valued at $3 trillion, is actively defending itself. The tech giant released a statement disputing the idea that Spotify has been disadvantaged by any anticompetitive practices on its part. It argued that Spotify, as the largest music streaming app in the world, does not pay Apple for the services that have aided them in building, updating, and sharing their app with Apple users across 160 countries globally. Apple also emphasized that Spotify holds a 56% share of the market, compared with 20% for Amazon Music and Apple Music’s 11%, according to MIDiA’s 2022 report on the subscription music market.
In addition, Apple disclosed various non-public details about Spotify’s business related to Apple’s platforms. These details included the utilization of thousands of Apple’s APIs across 60 frameworks, the use of Apple’s beta testing platform TestFlight, the submission of over 420 versions of its app to App Review and their approval, and the assistance provided by Apple engineers to resolve challenges faced by Spotify. Apple also shared that Spotify’s app had been downloaded, re-downloaded, or updated over 119 billion times across Apple devices.
The fact that Apple is preempting the EC’s decision with its own commentary is noteworthy. It demonstrates a company that firmly believes it is acting in the best interest of its customers and developer partners. Apple contends that its system of in-app purchases for items such as music subscriptions not only saves consumers the inconvenience of visiting external websites on the iPhone’s small screen but also safeguards against fraud, excessive data collection, consumer confusion over cancellations, and unauthorized purchases by children.
Apple contends that Spotify aims to increase its profits by leveraging regulations to its advantage. The concern raised in the EU complaint is that Apple’s App Store distorts competition in the music streaming market, affecting not only Spotify but potentially thwarting other rivals as well.
Spotify, however, has been vocal as an Apple Music rival and has opposed the company on various matters. To protect its interests and consumers, Apple has responded to the EU’s DMA regulation by introducing a new system requiring developers to pay for its services beyond just App Store payment processing. This involves levying a “Core Technology Fee” for developers who want to operate under the new rules.
For the record, Apple disputes Spotify’s claims of being harmed by anticompetitive practices. It highlights the success Spotify has achieved over the years, growing its streaming app from 25 million to 160 million subscribers over eight years with a 27% average growth rate. It also points out that Spotify qualifies for the “Reader app” exception to Apple’s rules, which allows it to link directly to its website for account creation and payment, similar to Netflix.
However, Apple seems to overlook Spotify turning a quarterly profit, recent workforce layoffs, and facing global competition on iOS from Apple Music, which is preinstalled on Apple devices and offered as part of the Apple One bundles. Apple underscores how closely Spotify has worked with the Commission on its complaint, having met with the regulators more than 65 times since the investigation began, which has been ongoing for years.
Spotify responded to Apple’s statement, stating that its success has been achieved despite Apple’s efforts to gain an artificial advantage by favoring its own music service and imposing unfair restrictions on Spotify. Spotify expressed support for the European Commission and its potential actions to create a fair ecosystem for all involved.
Additional reporting by Natasha Lomas; Updated on 2/22/24 at 5:54 PM with Spotify statement.
