Proactive Investors - Apple Inc (NASDAQ:AAPL)’s App Store conundrum is getting hotter.
To comply with the Digital Markets Act (DMA), the Cupertino megacap dramatically altered its policies in the European Union in January by allowing rival app stores on its iPhone smartphones for the first time.
Under the new policies, developers were also given the right to use payment service providers (PSPs) other than the App Store’s service.
Apple's previous policy of exclusively hosting iPhone apps through its own App Store while taking a 30% commission consistently drew criticism and accusations of monopolistic behaviour.
But Apple’s newly liberated app policies have drawn fresh criticism for retaining a stringent 27% commission fee on developers who process payments using a non-Apple PSP.
Basically, if developers want their apps on the iPhone, they still need to pay a hefty commission, even if they don’t use Apple’s payment services.
Spotify slammed Apple for this “outrageous” policy, stating: “Once again, Apple has demonstrated that they will stop at nothing to protect the profits they exact on the backs of developers and consumers under their app store monopoly,” the music streaming service accused.”
But the Swedish music streaming giant might be getting the last laugh in, if weekend reports from the Financial Times prove accurate.
According to sources, the EU is poised to slap a €500 million (£427 million) fine on Apple for anti-competitive behaviour concerning music streaming access.
The core of Spotify’s original complaint, filed back in 2019, relates to Apple blocking Spotify and other streamers from telling users of alternative, cheaper ways of subscribing to their services.
“In recent years, Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience—essentially acting as both a player and referee to deliberately disadvantage other app developers,” Spotify boss Daniel Ek said at the time.
He accused Apple of implementing “a series of technical and experience-limiting restrictions” on consumers running Spotify on the rival tech company’s devices.
“For example, they limit our communication with our customers—including our outreach beyond the app,” said Ek. “In some cases, we aren’t even allowed to send emails to our customers who use Apple.
While it’s true that Apple has made progress in levelling the playing field in recent months, the tech giant’s historically authoritarian app policies may now be coming home to roost.