Spotify To Bypass Apple's 30% App Store Fee In Europe Via In-App Purchases: Report
Portfolio Pulse from Benzinga Neuro
Spotify Technology SA (NYSE:SPOT) plans to allow European users to make in-app purchases directly, circumventing Apple Inc.'s (NASDAQ:AAPL) 30% App Store fee. This change, set for March, aligns with the new European competition law, the Digital Markets Act (DMA), which mandates equal treatment for all apps. Spotify has been in a legal dispute with Apple over the fee structure, which it claims forced them to increase subscription prices. Apple is challenging the EU's decision and is facing a $1 billion lawsuit from app developers.
January 24, 2024 | 2:42 pm
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NEGATIVE IMPACT
Apple could face a minor negative impact due to Spotify's decision to bypass its App Store fees in Europe, potentially reducing Apple's revenue from these transactions.
Apple's revenue from Spotify's in-app purchases may decrease as a result of this move. However, given Apple's diverse revenue streams, the overall financial impact may be limited in the short term.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 60
POSITIVE IMPACT
Spotify's move to bypass Apple's fees in Europe could improve its margins on in-app purchases, potentially boosting profitability and investor sentiment.
By avoiding the 30% fee from Apple, Spotify could retain more revenue from European in-app purchases, which may lead to improved earnings and a positive investor outlook in the short term.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80