Apple Relents: Spotify Allowed to Display Pricing in App, But Linking Still Not Permitted

by John Nowacky
in $$$, Action, News
on 14 August 2024

In a surprising move, Apple has reversed its decision and is now permitting Spotify to display pricing information within its app, including promotional offers. This comes after three months of rejecting a previous app update from Spotify that included these features. The change of heart also comes four months after Apple was fined $2 billion by the EU for engaging in anticompetitive practices against its streaming music rival.

For years, Spotify has accused Apple of unfair advantages in the music streaming industry. Specifically, Spotify argued that Apple Music enjoyed an unfair edge because it allowed iPhone owners to easily subscribe within the app, while Spotify was required to pay Apple a 30% cut if it wanted the same functionality. Furthermore, Apple previously prohibited Spotify from displaying subscription pricing within the app unless it used in-app purchases.

Earlier this year, Spotify attempted to test Apple’s resolve by releasing an app update that included subscription prices. Unfortunately, Apple initially rejected that update. However, Spotify reports that Apple has since changed its stance and allowed the update to be implemented.

While Spotify can now show pricing details to iPhone users in the EU, Apple still refuses to permit direct linking to Spotify’s website within its app. As a result, Spotify and other music streaming services in the EU are unable to provide a simple option for consumers to click a link and make in-app purchases. Spotify is therefore calling on the EU to intervene and require Apple to enable direct links.

This recent development marks a substantial step toward resolving the ongoing dispute between Spotify and Apple. However, Apple’s reluctance to allow a clickable link raises questions about its reasoning. Typing a URL manually would hardly pose a significant obstacle to users, and allowing the link would likely address the antitrust complaint entirely. By maintaining this restriction, Apple may be exposing itself to further legal repercussions, all for the sake of making one word clickable.

Relevant facts not mentioned in the article:

1. Apple’s App Store guidelines have faced criticism from several other app developers, such as Epic Games, for alleged anticompetitive behavior.

2. In 2019, Spotify filed a complaint with the EU against Apple, accusing the tech giant of anticompetitive practices. This eventually led to the EU’s investigation and subsequent $2 billion fine against Apple.

3. Apple’s 30% cut from in-app purchases has been a point of contention for many app developers and has led to debates about fair competition in the app market.

4. Apple’s App Store is the primary source of revenue for the company, with billions of dollars generated from app purchases and in-app transactions.

5. Spotify’s user base continues to grow steadily, reaching over 365 million active users globally as of March 2022.

Important questions and answers:

1. Why did Apple reverse its decision and allow Spotify to display pricing information in its app?
– Apple’s change of heart may have been influenced by the EU’s antitrust investigation and subsequent fine. It could also be a strategic move to improve its public image and address accusations of anticompetitive behavior.

2. What challenges does Spotify still face with Apple despite the pricing display permission?
– Spotify is still unable to provide a direct link to its website within the app, preventing users from easily making in-app purchases. This creates an uneven playing field compared to Apple Music and raises concerns of anticompetitive practices.

3. What advantages does Apple have in the music streaming industry?
– Apple has the advantage of owning a popular smartphone platform (iOS) and can offer a seamless user experience by allowing iPhone owners to easily subscribe to Apple Music within the app.

Key challenges or controversies:

1. Anticompetitive practices: Apple has faced numerous allegations of anticompetitive behavior, especially regarding its App Store policies and treatment of app developers.

2. Fair competition: The 30% cut Apple takes from in-app purchases has been a subject of debate, with critics arguing that it gives Apple an unfair advantage over competing apps.

3. Direct linking restriction: The refusal to allow direct linking to Spotify’s website poses a challenge for Spotify and other music streaming services in the EU, limiting their ability to provide a seamless user experience and compete on equal terms.

Advantages and disadvantages:

Advantages of Apple’s decision to allow pricing display:
– Improved perception of Apple’s commitment to fair competition
– Addressing one of the ongoing disputes between Apple and Spotify
– Potential to mitigate legal repercussions and regulatory interventions

Disadvantages of Apple’s decision to restrict direct linking:
– Raises concerns over anticompetitive behavior and unfair competitive advantage
– Limits user convenience and ease of in-app purchases
– May prolong the ongoing dispute between Apple and Spotify

The source of the article is from the blog enp.gr