Technology
Music Revolution: Subscriptions Migrate Away from Apple's Domain
Music streaming services break away: Future promotional offers directly to users – outside of Apple's App Store!
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Apple introduces a change that allows music streaming providers to direct their users to subscriptions outside the App Store in the European Economic Area. This measure responds to a multi-billion euro fine from the EU Commission and a complaint from Spotify. However, Apple still charges a fee of up to 27 percent of the purchase price for this redirection. The decision follows the EU's demand to create opportunities for external subscription conclusions but was supplemented by Apple with the note that the company can continue to charge fees for the use of its technologies and services.
Until now, services like Spotify were not allowed to point out alternative subscription sign-ups outside of Apple's platform within their app. For subscriptions concluded within the App Store, Apple traditionally takes a fee of 30 percent in the first year and thereafter 15 percent. Spotify and other services subsequently offered to conclude subscriptions only outside of the App Store to circumvent these charges.
The EU Commission had imposed a fine of 1.84 billion euros on Apple for restrictions on music streaming providers. The fine is intended to encourage the company to create fair competition conditions. Of the total fine, 40 million euros are direct economic disadvantages for Spotify, the rest serves as a deterrent. Apple plans to appeal the decision, but must implement the requirements of the Commission.
As a result of the announcement of these innovations, Apple shares recorded a slight decline in NASDAQ trading. The development indicates that regulatory decisions can have direct effects on the business models of large technology corporations, while at the same time reshaping the landscape for competitors such as Spotify.