23 Feb, 2024

Apple criticises Spotify ahead of anticipated €500m EC fine

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Apple criticises Spotify ahead of anticipated €500m EC fine

It’s been widely reported this month that the European Commission is preparing to fine Apple around €500m at the conclusion of its long-running investigation into a competition complaint filed by Spotify in 2019.

Neither the EC nor either of those companies has confirmed these well-briefed reports, but while we await the official announcement, Apple has gone on the attack with a statement sent to media outlets (including Music Ally).

“We’re happy to support the success of all developers — including Spotify, which is the largest music streaming app in the world,” said the statement, before getting punchy.

“Spotify pays Apple nothing for the services that have helped them build, update, and share their app with Apple users in 160 countries spanning the globe. Fundamentally, their complaint is about trying to get limitless access to all of Apple’s tools without paying anything for the value Apple provides.”

Apple also provided journalists with a range of stats relating to Spotify’s business, including claiming that it has a 56% share of the European market; that Apple has approved 420 versions of Spotify’s iOS app down the years; and that Spotify has been downloaded, redownloaded or updated more than 119bn times on Apple devices.

Apple is also unhappy that Spotify has met with the European Commission more than 65 times since its complaint; believes there is no evidence of consumer harm in a music-streaming market that (in Europe) has grown from 25 million subscribers to nearly 160 million; and essentially claims that rather than supporting competition, the EC’s investigation will simply cement Spotify’s position as a dominant market leader.

It’s quite the blast, and one that suggests Apple is preparing for a verdict that goes against it that corresponds to this month’s leaks. Spotify has already hit back with its own statement, as is the way of these things.

“Spotify’s success has happened despite Apple’s best efforts to gain an artificial advantage by favouring their own music service at every turn while placing roadblocks and imposing unfair restrictions on ours,” said its spokesperson.

“Under their current rules Apple controls Spotify’s access to its own customers and gives Spotify one of two untenable options: We either have to deliver a poor user experience where we can’t directly communicate how to buy or subscribe to Spotify on iPhones or we have to accept a 30% cost disadvantage against our biggest competitor.”

Zoom out. Apple and Spotify really don’t like one another. The EC seems set to side with Spotify over the (narrowed down) specifics of its investigation. This plus regulatory pressure elsewhere has already led to changes in how Apple runs its App Store which address some of Spotify’s complaints (albeit while infuriating the latter all over again about some of the attached strings).

€500m is a big fine until you remember that Apple’s revenues in its last fiscal year were $383.29bn, meaning that it makes the dollar equivalent of that fine in just over half a day’s sales. However the Commission orders Apple to change its processes may be more meaningful, but as we said, those changes may well have already happened.

The key question is what these changes will really mean for the music-streaming market in Europe – for Apple Music and its rivals alike. And that, alas, is a question that won’t be answerable until this investigation is finally settled, and its impact has had time to take effect.

Source: Music Ally

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