In March, Spotify shook the table when the company accused Apple of stifling competition through its “Apple tax.” Notoriously, Apple takes a 30 percent “tax” cut from any subscriptions made in its App Store.
Now, Apple may be facing some repercussions. According to the Financial Times, three unnamed sources confirmed that the European Union has decided to launch an antitrust investigation into Apple.
If the EU does launch an investigation, the Financial Times reported that they can make Apple change business policies deemed unlawful and issue fines of up to 10 percent of a company’s global turnover.
“If we pay this tax, it would force us to artificially inflate the price of our Premium membership well above the price of Apple Music,” Spotify CEO Daniel Ek said in a March blog post. “And to keep our price competitive for our customers, that isn’t something we can do.”
In addition to Apple’s Tax, Spotify claimed that Apple restricts music-streaming services in competition with its own Apple Music. Ek said that Apple was “acting as both a player and referee to deliberately disadvantage other app developers.”
When Spotify originally announced its complaint, the company outlined its position in a YouTube video called, “Time to Play Fair.”
An EU spokesperson told CNBC, “The Commission has received a complaint by Spotify, which we are assessing under our standard procedures,” but wouldn’t confirm nor deny an investigation. However, the EU has gone after big tech companies in the past — including Apple.
In 2016, the EU found that Apple benefited from illegal tax benefits from 2003 to 2014, as reported by TechCrunch. Apple was hit with a $15 billion fine as a result.
Other tech companies have faced scrutiny from the EU as well. According to CNN, in total, Google’s paid €8.2 billion — $9.3 billion U.S. — in fines to the EU since 2017.
It will be interesting to see how this conflict between Spotify and Apple plays out. The EU does have a history of slapping big tech companies with fines for antitrust violations. However, most of these companies pay the fine, shake it off, and go about business as usual.