TECH NEWS – Apple could face a fine of up to 500 million euros from the European Union, but it won’t hurt the company much ($33.9 billion in profit last quarter).

Spotify filed a complaint in 2019, and the fruits of that complaint are now ripening. The EU believes that Apple is using its power and antitrust business practices to keep rivals (including Spotify) at bay. If the investigation finds the Cupertino-based tech giant guilty, it would have to pay €500 million in fines!

Spotify’s complaint was that it had to raise its monthly subscription fee to cover the cost of staying in the Apple App Store (i.e. Apple’s 30% profit margin), creating the farcical situation where Spotify had to charge subscribers more than they would have paid for Apple Music. This meant that the competition between the two services was not entirely clear-cut, as Apple does not charge App Store fees for its own music service, making it cheaper than its rival. Spotify CEO Daniel Ek claimed that Apple was both a player and a referee…

The Financial Times, citing five people with detailed knowledge of the investigation, reported that the EU could announce the outcome of the investigation in early March and that Apple could face a fine. There could also be a ruling that Apple broke EU law with its App Store rules by suppressing competition. This could lead to a ban on the company: it cannot prevent music streaming providers from offering a better deal outside the App Store, including skipping in-app microtransactions (30% profit margin).

Apple spokeswoman Hannah Smith says that the App Store has helped Spotify become a leader in Europe and hopes that the investigation will come to nothing. And we hear this while Apple is being forced to open the App Store in the EU because of the Digital Markets Act.

Source: WCCFTech (https://wccftech.com/apple-could-be-fined-538-million-by-the-eu-for-anti-trust-practices/), Financial Times (https://www.ft.com/content/1e677a7e-9494-4f5b-a724-9e58ef26b34f)