Apple is currently facing potential sanctions from the European Union, including a substantial fine and changes to its App Store policies, over a complaint from Spotify. Spotify alleged that Apple’s App Store control forced them to increase subscription prices. The decision, expected early next year, could involve a fine of up to 10% of Apple’s annual sales. While such maximum penalties are rare, the EU often requires companies to modify their business models, which can have a significant impact.
In response, Apple recently allowed Spotify and other services to direct users to external websites for subscriptions, avoiding Apple’s cut of up to 30%. However, Spotify criticized these changes as inadequate, asserting that restrictive conditions still apply.
Margrethe Vestager, the EU antitrust czar, has a history of challenging major tech firms like Apple and Google. Under her leadership, Google faced fines exceeding €8 billion, and Apple was ordered to repay €13 billion in tax breaks from Ireland.
The EU is also implementing new regulations to prevent anti-competitive practices among tech firms. The Digital Markets Act, effective from March 2024, will impose various restrictions on dominant companies, such as prohibiting them from favoring their own services and combining user data across platforms. Major tech companies, including Apple, Meta Platforms Inc., and ByteDance Ltd., have sought EU court reviews on how these new rules might affect their business models.
