The European Union plans to hit Apple Inc (NASDAQ:AAPL) with an antitrust lawsuit over the company’s app store battle with Spotify Technologies (NYSE:SPOT).
What Happened: The suit stems from Spotify’s complaint nearly four years ago that Apple’s app store practices and fees caused Spotify to raise its prices and lose out on customers to Apple’s Apple Music app.
Sweden-based Spotify is Apple Music’s largest competitor. Spotify has more than double the number of global subscribers compared to Apple Music, according to Statista. The EU’s latest ruling against Apple is its latest effort to regulate big tech companies to protect consumers. Under the EU’s ruling, Apple could be subject to a large fine, but it’s unclear exactly how much it would be for.
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Why It Matters: European regulators frequently scrutinize big-tech companies.
And Apple is often in its crosshairs. Recall how the EU ruled that Apple would need to comply with its standards regarding charging cables, which is in part why Apple switched to the USB-C charging port on its new iPhones compared to the company’s proprietary Lightning cable.
The EU has also made rulings against Meta, Google and Amazon in the last couple of years.
Apple has also gone to court over its app store practices with Epic Games, the creator of the popular video game Fortnite.
Tim Sweeney, the CEO of Epic Games, argued that Apple and Google’s practices of collecting nearly 30% commission on any purchases through the app store as overbearing and stifle competition.
Price Action: Investors appeared undeterred by EU’s decision to regulate Apple, with the company trading higher along with the rest of the tech sector after Fed Chairman Jerome Powell said it’s likely the central bank cuts rates at some point in 2024. Apple’s stock neared its all-time highs, briefly hitting $198 a share late in Thursday’s session.
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