In a development pitting two of the giants of online music against one another, digital media service Spotify has issued a no-holds-barred statement regarding tech giant Apple and the possibility of increasing commission fees that could be levied against the service in the UK.
Apple CEO Tim Cook, March 2023.
As reported by multiple finance and tech outlets, Apple revealed on Jan. 17 that it would permit users in the U.S. to make purchases outside its App Store, provided major app developers pay a 27% fee, which would include Spotify. Currently, the breakdown for the biggest developers is a 30% fee to use this system, while smaller developers pay around 15%, and 85% of developers don't pay a fee at all.
Spotify slapped back, calling the increase "outrageous," accusing Apple of "stopping at nothing" to protect its profits, and urging the British government to prevent this scenario from happening in the UK.
All this stems from a court ruling that the tech company was in violation of a competition law by failing to tell users about alternate avenues to make purchases outside the App Store. Under the change, app developers can now redirect customers to bypass the App Store payment system by using external links.
Travis Scott in Fortnite
This news is a direct result of the court ruling in favor of Apple in its dispute with Fortnite maker Epic Games, in a legal battle going back to 2010. Apple can continue to proceed to retrieve $73.4 million to cover losses and legal costs, according to a report in Reuters.
In regards to something similar happening in the UK, Yahoo Finance reported that "The European Commission launched an antitrust investigation into Apple in 2020 after Spotify made complaints about the 30% fee it pays the company.
"In February 2023, the EU narrowed this investigation to exclude Spotify’s request to remove the charge from the sale of digital goods and services."
As it stands, Spotify CEO Daniel Ek has been vocal in what he perceives as global domination from both Apple and Google. In an interview with the Financial Times in October 2023, he pushed on the UK to pass the Digital Markets, Competition, and Consumers Bill. As the Financial Times explains, this bill would "regulate competition in digital markets" and is currently in consideration by Parliament.
