The EU is poised to deliver a verdict in favor of Spotify's complaint against Apple's App Store policies, potentially imposing a substantial fine and prohibiting anti-steering practices by the tech giant.

(Photo : CHRIS DELMAS/AFP via Getty Images)
This illustration photo shows the Apple app store logo reflected from an iPhone onto the back of an iMac in Los Angeles, August 26, 2021. 

Ruling Against Apple in Spotify's complaint

In a significant development, European Union regulators have reportedly come down against Apple in its protracted battle with Spotify over App Store policies.  At the core of the dispute were the "anti-steering" rules, alleged to hinder platforms like Spotify from effectively promoting alternative payment methods. 

Although Spotify took a prominent stance in the opposition, Engadget reported that the ruling extends its impact beyond the realm of music streaming, affecting any software provider relying on a monthly subscription model.

Regulators are in the final stages of formalizing the decision, slated for an early release in the upcoming year. In addition to the ruling, the EU is anticipated to impose penalties on Apple for the contested practice, potentially issuing an outright ban. 

Speculation surrounds a substantial fine for Apple, with experts suggesting it could amount to as much as ten percent of the tech giant's annual global revenue, a figure reaching nearly $40 billion. This underscores the ongoing scrutiny and regulatory challenges faced by companies in navigating antitrust concerns and market practices.

However, the anticipated penalty is expected to be more focused on putting an end to abusive practices rather than imposing a substantial fine, aligning with the EU's emphasis on rectifying harmful behaviors. 

The significant development will be Apple's compelled adherence to fair practices in its European operations, thereby concluding the contentious anti-steering practices. Until the regulatory body issues its official verdict, Bloomberg reported that the outcome remains uncertain.

Triggering Spotify's Complaint

This development stems from an investigation initiated four years ago, triggered by Spotify's complaint asserting that Apple's anti-steering practices compelled the music-streaming platform to increase prices to offset expenses associated with its presence on the App Store. 

The process unfolded with an initial "statement of objections" against Apple in 2021, followed by a formal charge sheet in February of the current year, according to a report by The Verge.

In a "preliminary view" expressed in the formal charge sheet, it was asserted that Apple's imposition of "anti-steering obligations" creates an environment of "unfair trading conditions." 

Also Read: Twitter, Spotify vs. Apple: 'Absurd' App Store Rules is a Massive Concern for Executives

Historically, Apple restricted rival streaming services, like Spotify, from incorporating links in third-party apps to facilitate their subscription sign-ups. Although Apple has marginally eased this restriction following an antitrust investigation in Japan, the potential EU ruling might further diminish this constraint.

The European Regulatory Commission is set to examine allegations that Apple impeded companies from promoting alternative subscription methods, excluding any scrutiny related to in-app purchases. 

Simultaneously, the EU is conducting a separate investigation into Apple's tap-to-pay technology, probing potential antitrust concerns. Reports are indicating ongoing settlement discussions for this particular case.

Related Article: Spotify is Not Supporting In-App Purchases on iOS, Apple App Store-Remains Unmoved