Apple has unveiled new measures aimed at facilitating music streaming app developers within the European Economic Area (EEA) to inform users about alternative purchasing options for digital services via its App Store.
The move follows a recent penalty imposed by the EU on Apple, amounting to 1.84 billion euros ($1.99 billion), citing Apple’s anti-competitive practices that hindered fair competition among music streaming platforms.
Accused of imposing unjust trading conditions, the European Commission had rebuked Apple in March, demanding an end to such practices.
This development stems from a 2019 complaint filed by Swedish music streaming service Spotify, which accused Apple of impeding its ability, as well as that of other similar services, to communicate with users about payment alternatives beyond the confines of the App Store.
According to market research conducted by Zion Market Research, the global music streaming market was valued at USD 41.52 billion in 2023 and is projected to reach USD 104.09 billion by 2032, registering a notable compound annual growth rate (CAGR) of nearly 10.75 percent between 2024 and 2032.
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“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store. They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem,” said Margrethe Vestager, Executive Vice-President in charge of competition policy.
At the heart of the issue were the restrictive measures imposed by Apple on app developers, preventing them from informing iOS users about alternative and potentially cheaper music subscription services available outside of the App Store.
The investigation revealed that Apple wielded complete control over the iOS user experience, dictating terms and conditions for developers seeking to distribute their apps via the App Store. Findings included Apple’s prohibition on music app developers on App Store from disclosing prices of subscription offers available outside the app, highlighting price disparities between in-app purchases and external subscriptions, or providing links to external subscription services within their apps.
The European Commission concluded that Apple’s anti-steering provisions created unfair trading conditions. These restrictions were deemed unnecessary and disproportionate, hindering iOS users’ ability to make informed decisions regarding their music streaming subscriptions and adversely impacting competition in the market.
The Commission’s investigation also revealed the detrimental effects of Apple’s conduct on consumers. Over nearly a decade, iOS users may have been subjected to inflated subscription prices due to Apple’s commission fees passed on to consumers. Additionally, the anti-steering provisions led to a degraded user experience, with users either facing difficulties in finding alternative services or refraining from subscribing altogether.
Under the revised policies announced by Apple on Friday, music streaming app developers will now be allowed to prompt users to provide their email addresses, enabling the developers to send them links to their websites for purchasing digital music content or services. Additionally, developers can inform users about where and how to make purchases, along with pricing details.
Apple emphasized that this announcement grants “even more” flexibility to music streaming services such as Spotify, which currently commands a significant 56 percent share of the European market.
However, Apple clarified that the EU’s decision does not impinge upon its right to levy commissions for the utilization of its tools, technologies, and ongoing services.
Baburajan Kizhakedath
