Spotify to Offer In-App Purchases on iPhones in EU Following Digital Markets Act
In a significant development for the music streaming industry, Spotify announced on Wednesday that it will be able to offer in-app purchases and subscriptions through iPhones in the European Union starting from March. This comes after Apple was forced to comply with the EU’s Digital Markets Act, which prevents the tech giant from filtering such transactions through its App Store. Prior to this change, Apple would take a 30% cut of the profits from developers’ in-app sales, but the DMA now prohibits this practice.
Under the new rules imposed by the European Union, Spotify users will be able to seamlessly purchase and upgrade their subscriptions to the music streaming service directly within the Spotify app on their iPhones. This will also apply to other products such as audiobooks. Previously, these transactions had to go through Apple’s App Store, where the company would collect a percentage of the profits. With this restriction lifted, Spotify users can enjoy a smoother and more convenient experience with the ability to manage their subscriptions within the app.
In addition to allowing in-app purchases, Spotify will also be able to provide details on subscription prices and audiobooks. This is a significant development as Apple had previously blocked Spotify from sharing such information within the app. These changes will not only benefit Spotify users but also artists, authors, and creators who are looking to connect with their audiences and offer better-value payment options. With greater transparency and accessibility, the entire ecosystem of music and other creative content will thrive.
The European Commission designated Apple, along with five other companies including Alphabet, Amazon, ByteDance, Meta, and Microsoft, as “gatekeepers” in September. This designation means that these companies are required to fully comply with their platforms within six months, as mandated by the Digital Markets Act. The DMA aims to prevent gatekeepers from favoring their own services and products over those of third parties. These regulations are meant to create a fairer playing field and ensure competition in the digital market.
Last week, the European Commission sought public input on Apple’s proposals to bring its payment service, Apple Pay, in compliance with EU competition rules. This move indicates that the EU is taking a closer look at competition restrictions imposed by tech giants such as Apple. As the digital landscape continues to evolve, European regulators are actively working to protect consumers and promote fair practices within the industry. The new regulations, combined with Spotify’s ability to offer in-app purchases, signify a shift toward greater transparency and choice for users.
Analyst comment
Positive news: Spotify being able to offer in-app purchases on iPhones in the EU following the Digital Markets Act.
As an analyst, I expect the market for music streaming services to become more competitive as other platforms may also benefit from the Digital Markets Act. This could lead to increased innovation, better pricing options, and a more convenient user experience for consumers.
