In March, Apple was slapped with a hefty €1.8 billion fine ($2 billion) following a complaint lodged by Spotify in 2019. At the core of the dispute was Apple’s policy of imposing a 30% fee on app makers for first-year user subscriptions and a 15% fee for subsequent years. This practice put Spotify at a disadvantage, as it had to raise subscription prices to compensate for the fee, giving Apple Music an unfair competitive edge.
However, Apple is not passively accepting the fine. Bloomberg reports that Apple has taken legal action by filing a lawsuit with the EU’s General Court in Luxembourg, aiming to challenge and overturn the substantial penalty.
Apple contends that the European Commission failed to provide convincing evidence that consumers were harmed by its App Store policies. However, this argument overlooks the fundamental principles of antitrust laws, which expressly prohibit predatory pricing regardless of its immediate impact on consumers.
The image below shows the gist of it.
Previously, apps were prohibited from even mentioning that users could subscribe for less outside the App Store. However, the European Commission has since introduced regulations requiring Apple to allow app developers to promote alternative payment options.
These changes have allowed developers on Apple’s App Store to include their own purchase links, bypassing the so-called “Apple Tax.” Nonetheless, Apple still collects commissions ranging from 12 to 27%. Although this marks a slight reduction from the initial 15-30% range, it remains a relatively modest decrease.
Despite Apple’s allowance of third-party purchase links, they are still impractical for commercial use due to high commissions and a complex web of restrictions.
