Apple faces a fine as large as $26.6 billion in antitrust probe

Apple faces a fine as large as $26.6 billion in antitrust probe
The Financial Times reports today that complaints made by music streamer Spotify against Apple will be investigated by the EU competition commission. The issue is the 30% cut of revenue that Apple charges apps in the App Store for using its payment system. Spotify calls this the "Apple Tax" and complains that it gives rival streamer Apple Music an unfair advantage. The complaint was originally lodged in March. While Apple takes 30% from Spotify and other music subscription services, it doesn't charge other apps like Uber.

If the EU rules in favor of Spotify, it can force Apple to change its business practices on the continent and fine Apple up to 10% of the company's global revenue. In Apple's case, the fine could total as much as $26.6 billion. Most likely, Apple and the EU competition committee will work out a settlement with the company promising to lower or end the so-called "Apple Tax."

Both Apple Music and Spotify have similar monthly subscription rates, with both charging $9.99 a month for an individual subscription, $14.99 a month for families with up to six members, and $4.99 a month for verified students. However, because of Apple's 30% cut, in the App Store Spotify charges $12.99 a month for individuals, $16.99 a month for families and $7.99 a month for verified students. Unlike Apple, Spotify does have a free tier of service that is ad-supported, although it doesn't allow users to download music or select individual songs. 


Just last week, Spotify announced that it grew the number of its paying Premium tier subscribers by 32% year-over-year during the first quarter. The company now has 100 million paying subscribers and 117 million who use the free ad-supported service. At last count, Apple Music had 56 million paying subscribers worldwide. However, in the states, it is Apple Music on top-barely. Just recently, the Wall Street Journal said that in the U.S., Apple Music has 28 million paying subscribers compared to 26 million for Spotify. 

Other music streamers agree with Spotify but are afraid of challenging Apple


A lawyer at Clifford Chance that helped Spotify file its complaint, Thomas Vinje, said that there are other music streamers that agree with Spotify's position. However, Vinje says that these other companies are "too afraid to take on Apple." Back in March, Apple responded to the charges by pointing out that Spotify used the App Store to grow its business over the years without making any contributions to it in return.


Apple has been fined before by the EU’s competition commission. In 2017, commissioner Margrethe Vestager ruled that Apple had to pay 13 billion Euros ($14.6 billion USD) in back taxes. The commission found that a tax deal Apple had with Ireland was actually considered to be illegal state-aid from the country.

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30 Comments

1. iloveapps

Posts: 855; Member since: Mar 21, 2019

Just pull off your spotify app on app store and optimized your spotify app on android.

2. vgking9699

Posts: 189; Member since: Mar 01, 2019

Google gets the same 30% from Spotify and google actually makes 45% from YouTubers videos

3. IT-Engineer

Posts: 533; Member since: Feb 26, 2015

Once Apple gets sanctioned, Google is next. As much as I don't like the fruit company, I hope Spotify gets smacked in the face. The AppStore needs maintenance, servers, developers, and so on. If you make money out of it, you have to contribute to it.

28. oldskool50

Posts: 1323; Member since: Mar 29, 2019

No they won't. because on Android you don't ever have to install ANY app via the playstore.

9. Back_from_beyond

Posts: 1377; Member since: Sep 04, 2015

But unlike with the App Store you can just sign up through the Spotify app without the Play Store to set up your account. Apple has banned apps from linking to websites for signing up, forcing new users to pay through the App Store or set up the account through the website. Google doesn't try to force the payments through the Play Store to get their cut, Apple does enforce it through the App Store to take 30%. Apple tries to restrict the ability to pay for subscriptions outside of the App Store to maximize profits, unfairly making developers settle for earning 30% less or forcing them to increase prices to compensate. It's unfair competition practices by Apple.

12. AdamChew

Posts: 1; Member since: Nov 05, 2011

"Just last week, Spotify announced that it grew the number of its paying Premium tier subscribers by 32% year-over-year during the first quarter. The company now has 100 million paying subscribers and 117 million who use the free ad-supported service." If the EU practise the rule of law Spotufy has no case because whatever Apple is doing certainly did not harm their business.

15. Back_from_beyond

Posts: 1377; Member since: Sep 04, 2015

Good thing you're not a lawyer.

27. oldskool50

Posts: 1323; Member since: Mar 29, 2019

But you can install Spotify on your phone on Android, without going through the Play Store. You can't on iOS. Which is the issue. And how many servers does it take to host millions of videos vs millions of just apps? How much bandwidth is needed for those videos to be played by MILLIONS at the same time vs apps. Hosting more videos has far and away more cost than apps do.

4. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

"Most likely, Apple and the EU competition committee will work out a settlement with the company promising to lower or end the so-called "Apple Tax."" And why should that happen?! Most likely, EU is going to say: "hey, just like Aldi is allowed to charge 25-35% while selling its own brands products, so is Apple."

13. TBomb

Posts: 1394; Member since: Dec 28, 2012

It's different because I can go to a different store to get my groceries. If you have an iphone you can't go to a different place to download apps. One-time purchases are also different than subscriptions. I can take a subscription to other platforms: PC, Android, Kindle. Why should Apple get 30% just because I have an iOS device with Spotify on it? It'd be different if I bought the app for $9.99 upfront, but after It's been downloaded, I don't think any company should be taking those profits in, except the devs. That goes for Google and any other store too.

16. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

The same goes for the apps: go to Microsoft Store and get them; you won't get "Aldi" apps, you'll get Lidl apps, but they are apps. "Why should Apple get 30% just because I have an iOS device with Spotify on it?" Because YOU chose to purchase the app/subscription, using Apple's system; if you had gone to Spotify/developer's site and had purchased the app/subscription from there, Apple wouldn't have gotten a penny from you; just do that and you can use the service through the (free) app you got from the App Store.

18. TBomb

Posts: 1394; Member since: Dec 28, 2012

You lost me on the Microsoft store with Aldi apps comment, so you might need to explain that one a little bit better. But let's run through an example here: I am on Verizon, with an iPhone Xr, while hooked up to my Comcast Wifi. I download and sign up for Spotify at $9.99/month. Why doesn't Verizon get a cut? They're my carrier that loaned me the phone while I pay it off. Where's Comcast's since I used their Wifi infrastructure? Without Verizon or Comcast, I wouldn't be able to access the App store to download it, so why does only Apple get the cut? Do auto manufacturers get a 30% cut of the satellite radio subscriptions? I don't know, maybe someone here does though. Stores like Aldi buy the products that they then sell at a higher price to make their money. Physical products like food are different than software like apps and need to be treated differently. Running and maintaining a physical store is different than maintaining what is eseentially an ecommerce store. App stores are just greedy if they continue to take 30% of subscription fees months and years after a subscription started. You won't change my mind, nor do I think you'll change anyone's mind, if your best reason is because they signed up on their iPhone.

20. lyndon420

Posts: 6737; Member since: Jul 11, 2012

You're paying Verizon and Comcast for data are you not?! They're getting their money.

21. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

Let me make it as simple as I can: when you buy something from a store and YOU CHOOSE to use a MasterCard branded credit card, MC Inc. gets a percentage of the payment, because YOU HAVE CHOSEN that particular credit card (if you pay with a check, the bank gets a commission and MC Inc gets absolutely nothing). You really don't understand how do marketplaces function; Amazon has a "referral fee" of 51% for some digital items, the average was ~20%; I have a store and by my law - I live in EU - I can have a fee from 0% to... 1 gazillion %; you know when I have a good margin? when I go over 30% - everything under is a bad margin. I don't need to change your mind, it's enough for me to show that neither Apple, not Google or Amazon, Aldi, Lidl, Metro or myself are wrong by asking for a percentage (even a high one like 30 or 130%) of the sale price as a referral fee.

29. oldskool50

Posts: 1323; Member since: Mar 29, 2019

"Because YOU chose to purchase the app/subscription, using Apple's system; " - THIS IS FALSE. You don't get a choice and that is the issue. if you have an IOS device, you have zero choice but to purchase everything through the Apple store. When you use ANY other platform, you have alternatives for purchasing apps, unless those apps are from the original OEM. Example, if I want Office 365, I basically must purchase it from Microsoft or an authorized partner. But if I want to buy a like Fortnite, I can download it from whatever store I want when I want if the dev makes it available that way. Apple maybe should get the initial cut for the very first purchase on a subscription. But when I renew, Apple should not get a cut. Who else does this? NO ONE ELSE.

30. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

"if you have an IOS device, you have zero choice but to purchase everything through the Apple store." I can get office directly from Microsoft, Netflix directly from Netflix, YouTube or gsuite directly from Google, fitness, yoga, cooking classes right from the developer's sites. And I can use them all on my iPhone without Apple getting a penny. Any app I can't pay for outside of the App Store is because of the developer's laziness.

5. pogba

Posts: 105; Member since: Jun 13, 2018

Whats up with these companies who sue each other after agreeing to terms? unfair advantage? its their platform, of course they have an advantage. I'm not an apple fan or a music streamer but this is just ridiculous. Hope the judges shove the complaint up spotify's ass.

6. mootu

Posts: 1500; Member since: Mar 16, 2017

If they charge one company 30% they should charge all 30%, they don't. That is the reason new Netflix subscribers cannot subscribe through the app store anymore.

7. Ashoaib

Posts: 3276; Member since: Nov 15, 2013

It is unfair advantage for Apple and must be fined. Because Apple doesn't allow to install apps on iPhone from 3rd source. Developers are forced to use app store. Then Apple charge ridiculously high charges while giving unfair advantage to apple music. Either app store must be shutdown or applications should be allowed from other sources. Then there will be fair competition. Apple must find other ways to increase the security of apps downloaded from other sources. Not by forcing to use only app store.

8. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

"Developers are forced to use app store." No they are not; they can develop for Android, windows, browsers - nothing is forcing them to make apps for iPhones.

10. Back_from_beyond

Posts: 1377; Member since: Sep 04, 2015

If you want your app to be available on iOS, you must go through the App Store. Apple doesn't allow apps to link to outside sources for signing up and missing out on subscription payments. Apple tries to force users to pay for subscriptions through the App Store and developers are forced to settle for a 30% cut in revenue through the App Store or to increase their prices and make their subscriptions less competitive to compensate for the lost income and in doing so giving an unfair advantage to Apple. The fact Apple also doesn't enforce the same rules for all services provided through the App Store gives it all a highly anti-competitive taste.

14. TBomb

Posts: 1394; Member since: Dec 28, 2012

Good point - but you're talking to Leo_MC. He/She doesn't quite see the world the same as everyone else. (See the "it's not a notch, it's an extension" arguments)

17. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

That is not true; I can access YouTube - for instance - through Safari (of Firefox, or Chrome, if I want), the same goes for Microsoft Office and other apps; I can purchase Google Drive storage, using my iPhone and without going through App Store, Netflix, Spotify or OneDrive. You just have absolutely no idea how iPhone - and Apple ecosystem - work, that's why you are writing those dumb replies.

19. TBomb

Posts: 1394; Member since: Dec 28, 2012

You missed the point of Back_from_beyond's comment. Apple does not allow apps to link to outside sources to sign up for subscriptions. Yes, you can go to Safari (or another browser) to sign up if you want. However, that requires more effort and time to do and if the consumer is not saving any money, they see no personal benefit for doing so. Why sign up on a mobile site, then log into the app after your account is created when you can signup and login in one step? This is done on purpose because the majority of people are either a) unaware, b) already signed up via the app, c) don't care, d) want to cost Spotify (or other subscription service more money), or e) too lazy. Have you ever noticed or researched how many people fail to delete their Amazon account because doing so is so convoluted and made difficult on purpose? Have you ever noticed how easy it is to sign up for things but difficult to get out? This follows a similar idea.

22. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

Of course Apple allows links, but only to its payment system - and that is absolutely normal. I can understand for a service in which the iPhone is just a small part (like MS business tools that I use on PC, laptop, phone, I share the work with my coworkers etc), but with an app like Spotify - which I only need to pay if I want to use it on the phone (I have no problem, using the free version in the browser) - I want to subscribe through the phone and I think Apple (Google too) is entitled to get a cut of my money for this service. I understand what you're saying, but that doesn't make it right for a developer like Spotify to want access to iOS users money without paying a referral fee.

23. blastertoad

Posts: 40; Member since: Jul 17, 2018

Ok lets use your example of web browsers. On mac, pc, ios, android, linux, freebsd ect. you can access services, download packages and manage subscriptions through multiple browsers of your choice. Your hardware choice is separate from your browser choice. If you want to buy games on windows you can choose to get a single title from multiple sources dependent on developer not hardware. eg. Microsoft store, Steam, Epic, GOG, itch.io, ect. You want an app on android, use the play store, galaxy app store, amazon app store ect. IOS is the only platform limiting your purchasing choices and developers options. This is bad for developers and consumers. That is the issue not the money. The other issue being brought up in this probe but not in the article is apps being disallowed by Apple. Apps monitoring screen time, or that find your airpods, ect. have been removed in the past as Apple removes access to competition. Yes it is their platform, but you can not argue it is good for consumers or sets a positive president for society in general. While typing this up I have been trying to come up with an analogy and the only thing that works is Putin and Russia. Capitalism works like democracy, but when you have an entity that removes all other options other then themselves or their services the ideals and ethics involved demand a change.

26. Leo_MC

Posts: 7203; Member since: Dec 02, 2011

iOS - in mobile world - is not like Windows for PC, iOS is like BSD (it even uses a BSD kernel); while BSD is designed for corporate usage (hence, the company behind it makes available the compiling engine, which means one can compile code for a said BSD system), iOS-BSD has the compiling engine closed (just like Google closed the service by default in Android), because it is designed for comercial usage. That's OK (and by ok I mean legal, it doesn't mean I support Apple), because iOS only owns a small percentage of mobile market share (in EU). As for removing competing apps: first, the rules are clear - if you charge money for a core system function, you're banned from the Store; second, those apps used a mdm profile (that's designed for corporate usage) in order to control personal designed functionalities - and this is security risk for the users (the mdm profile is controlled by the corporation and is able to communicate absolutely everything on your phone to the one that controls it; do you think it's ok to install such a security risk on your children personal devices?). And last, but not least, a corporation works exactly as a state: the shareholders chose a board of directors (that's the parliament) that appoints the officers (ceo, cfo, coo are the president/prime minister and his ministers); the officers hire people (the state apparatus). What some seems to fail to understand is that a corporation works for the... shareholders. The clients are just Mexican, Japanese, French citizen that have comercial interactions with US; US doesn't have to give a f**k that the Libyan citizen wants to walk through New York without a valid passport; doesn't have to give a f**k that an Afgany wants to stone his woman in LA for getting her burqa off etc; that's not democracy, democracy is only what shareholders - Apple's citizen - want. Sory, but you and me are just Egyptians in this example...

24. vgking9699

Posts: 189; Member since: Mar 01, 2019

If Apple allowed apps to be download from outside sources then iOS would be just as bogged down with malware and buggy apps as android cuz Apple couldn’t regulate weather or not those apps were even legal or full of issues just like so many apps on android that aren’t from google play

11. Plutonium239

Posts: 1199; Member since: Mar 17, 2015

30% is very steep. If every app had to contribute 3% of profit towards maintenance of the app store, that would be much more fair.

25. vgking9699

Posts: 189; Member since: Mar 01, 2019

Then you must really hate googles 45% they charge YouTubers for their money they get for making videos that bring in money

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