In March, Apple faced a significant €1.8 billion fine ($2 billion) following a complaint filed by Spotify in 2019. The core of the complaint was that Apple imposes a 30% fee on app makers when users subscribe to their services for a year, and 15% for subsequent years. This practice disadvantaged Spotify, as it had to increase subscription prices to offset the fee, giving Apple Music an unfair edge.
The image below shows the gist of it.
Apple is not simply accepting the fine. According to Bloomberg, Apple has initiated legal action by filing a suit with the EU’s General Court in Luxembourg, aiming to challenge and reverse the substantial penalty.
According to Apple, the European Commission didn’t offer convincing proof that consumers suffered due to its App Store rules. However, it seems this overlooks how antitrust laws function, as predatory pricing is explicitly prohibited right off the bat, regardless of whether it is affecting anyone or not.
In the past, apps couldn’t even mention that users could subscribe for less outside the App Store. However, the EC has since introduced regulations requiring Apple to permit app developers to advertise alternative payment options.
Thanks to these adjustments, developers on Apple’s App Store can now include their purchase links, bypassing the Apple Tax. However, Apple still takes a share through commissions, ranging from 12 to 27%. While this represents a slight decrease from the initial 15-30% range, it’s still a relatively small reduction.
Despite Apple permitting third-party purchase links, they remain impractical for commercial use because of high commissions and the associated web of restrictions.
