EU's Fine on Apple: What Changes Can We Expect in the Competition with Spotify?

News of Apple facing a hefty €1.88 billion fine from the EU suggests significant shifts in the digital market. Let's delve into the background using these key points.

1. Spotify vs. Apple: Clash in the Music Streaming Market

• Spotify, based in Sweden, dominates the global music streaming app scene with a staggering 56% market share in the EU.
• In contrast, Apple Music holds a mere 8% market share, placing it fourth in the rankings.

2. Controversy Over Apple's Payment Fees

• Apple imposes a 30% fee on payments made through Apple Music.
• Protesting this, Spotify initiated an event in 2016, encouraging users to make payments through the Spotify website rather than Apple's platform.

3. EU Lawsuit Against Apple's Warning and Interference

• Apple warned Spotify against bypassing Apple's platform for payments and threatened to remove the app from the App Store.
• Alleging unfair competition, Spotify filed a lawsuit with the EU Commission, citing Apple's warnings and security update refusals.

4. EU's Digital Markets Act and Apple's Fine

• In March 2022, the EU introduced the Digital Markets Act to regulate anti-competitive practices of big tech companies.
• As a result, Apple faces a fine of €1.88 billion under this new legislation.

5. U.S. Response and Potential Lawsuits Against Apple

• The U.S. Democratic government aligns with the EU's stance, contemplating antitrust lawsuits against Apple.
• Investigations focus on Apple Watch's compatibility issues with non-Apple devices and challenges in using Apple's free messaging service, iMessage, on non-iPhone devices.

6. Future Changes Under the Digital Markets Act

• The Digital Markets Act mandates big tech companies to prohibit in-app payment fees and prevent self-preferencing.
• Fines can reach up to 10% of their revenue, posing a significant threat to companies like Apple, Google, Microsoft, Amazon, Meta, and ByteDance.

Comments: 

Apple, as a major player in big tech, is now navigating new regulations and heightened competition. The EU's Digital Markets Act and the accompanying fine will likely have repercussions not only for Apple but for global big tech companies. With the U.S. also gearing up for legal challenges against Apple, it's a crucial moment to observe the unfolding dynamics in the tech industry.