Future Tech

Music subscriptions in Europe can now be purchased outside App Store

Tan KW
Publish date: Sun, 14 Apr 2024, 01:54 PM
Tan KW
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Future Tech

BRUSSELS: Spotify, Deezer and other music streaming providers will in future be allowed to show iPhone owners in the European Economic Area how to start a subscription outside of Apple's App Store.

The iPhone manufacturer, pressured into loosening its grip on platforms and payments on its devices under a new EU law, nevertheless wants to charge a fee of up to 27% of the purchase price.

Apple introduced the new option around a month after the European Commission imposed a billion-euro competition fine, which was triggered by a complaint from rival Spotify.

At the same time, Apple emphasised at the weekend that the Commission's decision does not restrict the company from charging fees for the use of its technologies and services.

Apple charges a fee of 30% for subscriptions within its own App Store in the first year. After that - and for smaller companies from the outset - the fee is 15%.

Under the new setup for links from music apps to external subscriptions, the fee drops to 12% after one year. Apple will only charge the fee if the links are used by users within a week to start a subscription.

Spotify had expressed dissatisfaction with the fact that the service was not allowed to point out to users in its app where the subscription could be taken out on the web outside of Apple's download platform.

In this case, Apple does not receive a fee - but the subscription offer can be used in the app after registration. Just like Netflix, for example, Spotify stopped offering a more expensive subscription option within the app years ago.

At the beginning of March, the European Commission imposed a fine of €1.84bil on Apple and called on the company to create options for redirecting users to an external subscription.

The year-long investigation related to competition in music streaming apps - and the decision therefore only applies to this market. Of the fine, only €40mil related to actual economic disadvantages for Spotify, while the remaining €1.84bil are intended "as a deterrent," according to the Commission. Apple has announced that it will appeal, but must still implement the Commission's requirements.

 - dpa

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