Apple set to face formal EU antitrust review over Spotify complaint

By Nikita Chaurasia  Date: 2019-05-06

Apple set to face formal EU antitrust review over Spotify complaint

The EU has studied the complaint as well as surveyed users, competitors, and others in the industry, which led to the official investigation.

Reports confirm that the European Union will launch an official probe of Apple Inc. in the coming few weeks over an antitrust complaint filed by Spotify. Earlier this year, Spotify, the music streaming company, had complained to the antitrust agency of EU that Apple’s 30% cut of revenue effectively represented a tax on competitors.

Apparently, this dispute came as the iPhone maker shifted into new business areas that competed with third parties on its platform. Apple said that it only takes 30% from paid subscriptions and doesn’t charge for distributing free apps on its platform. The company also said that the rate drops to 15% for subscriptions extending more than a year.

However, in case of Spotify, Apple stated that several customers of the music streaming service use the ad-supported, free product and only a small portion of the subscriptions fall under revenue-sharing model of Apple.

According to Financial Times, the EU has studied the complaint as well as surveyed users, competitors, and others in the industry which led to the official investigation. The authorities have not set any deadlines for the investigation yet. 

Supposedly, EU enforcers have been successful in pushing companies to amend any business practices they consider illegitimate and fines could go as high as a 10th of their worldwide sales.

Sources familiar with the matter informed that Apple previously fired back at Spotify, the Stockholm-based company, saying that music streaming giants are looking to avail all the benefits without contributing to the marketplace. Spotify in turn said that Apple routinely blocked a few of its product upgrades like integration with the Apple Watch and the Siri digital assistant.

Seemingly, in the past week, Spotify had touched 100 million paid subscribers, which was a first for any online music service, and also added more customers in the latest quarter.

Source credit: https://www.bloomberg.com/news/articles/2019-05-05/eu-to-start-formal-probe-on-spotify-s-apple-complaint-ft-says

About Author

Nikita Chaurasia     aeresearch.net

Nikita Chaurasia

An accomplished professional in the field of content development, playing with words comes naturally to Nikita Chaurasia. After completing her post-graduate MBA degree in Advertising and PR, Nikita worked across numerous content-driven verticals, undertaking diverse r...

Read More

More News By Nikita Chaurasia

CDC updates guidelines, calls for vaccinated people to mask up

CDC updates guidelines, calls for vaccinated people to mask up

By Nikita Chaurasia

The Centers for Disease Control and Prevention issued new guidelines suggesting that people who are vaccinated against Covid-19 wear masks in public as well as indoor areas where the rate of the disease is high. The CDC also stated that teachers, sta...

iPhone’s hot streak could be hampered by global chip shortage crisis

iPhone’s hot streak could be hampered by global chip shortage crisis

By Nikita Chaurasia

Apple Inc. recently stated that the global chip shortage that has affected the sales of Macs and iPads, will now hit iPhone production and the expected revenue growth is likely to decelerate. This has resulted in lowering Apple’s shares. The c...

EV maker Rivian bags USD 2.5 Bn in a funding round led by Amazon, Ford

EV maker Rivian bags USD 2.5 Bn in a funding round led by Amazon, Ford

By Nikita Chaurasia

American electric vehicle maker Rivian Automotive LLC reportedly secured USD 2.5 billion in a funding round led by Amazon.com Inc, T. Rowe Price, D1 Capital Partners, and Ford Motor Co. In addition, the event also saw participation from Fidelity Man...

ICEA forms committee chaired by HP India MD to boost IT hardware sector

ICEA forms committee chaired by HP India MD to boost IT hardware sector

By Nikita Chaurasia

The India Cellular & Electronics Association (ICEA) recently announced the formation of a committee to promote manufacturing and exports of the IT hardware sector. The panel headed by Ketan Patel, HP India’s Managing Director, will set up a...

Amazon to stop on-site COVID-19 testing in U.S. warehouses this month

Amazon to stop on-site COVID-19 testing in U.S. warehouses this month

By Nikita Chaurasia

Amazon is reportedly planning to discontinue on-site Coronavirus testing for its warehouse employees in the United States. The retail giant confirmed slowing down the testing by 30th July and will only resume after receiving new guidelines change fro...