The EU’s Fine Against Apple in Its Spotify Case Echoes a Familiar Story

The European Commission is planning to announce a fine of about 539 million euros ($500 million) on Apple Inc. next month after investigating a complaint from Sweden-based music app maker Spotify Technology SA regarding Apple’s policy of restricting apps from linking out to their own sites for services such as payments.

The regulator’s action, reported over the weekend by The Financial Times, represents a substantial reduction from penalties the regulator sought in a notice it posted a year ago as it pursued its investigation of the U.S. technology titan.

The EU’s case follows similar U.S. litigation brought against Apple by Epic Games, in which a federal court ruled in 2021 that Apple must allow the app’s developers to refer users to outside payment systems. Cupertino, Calif.-based Apple could not be immediately reached for comment on the EU’s latest action.

The Commission, which operates as Europe’s antitrust regulator, had already won an agreement from Apple to allow outside entities, including payment processors, to access technology in the iPhone such as the near-field communication chip, an element over which Apple has exercised tight control. The Commission’s new rules in that case are expected to emerge in March.

The penalty levied on Apple in the Spotify case comes as the company and its so-called walled-garden approach to the way it manages apps have become increasingly intertwined with payments. Significant revenue in app transactions can be at stake, as Apple’s standard fee for processing payments has been as much as 30%. In the wake of the Epic Games decision, Apple has reportedly levied a 27% fee.

At least some observers of Apple and its payments policies argue disputes between developers and Apple would be best resolved out of regulators’ hands. “I certainly do not sympathize with the EU, it’s almost a malign force,” says Eric Grover, a payments consultant, in referring to the Commission’s earlier case against Apple. “But the heroes and villains aren’t clear here. The average app developer would love to pay less.” At bottom, he argues, developers simply “are interested in selling more apps.”