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Apple’s App Store contributed just around 8 percent to Apple’s revenue in 2024 but generated significant profit margins of over 75 percent, according to publicly released court records cited by the Wall Street Journal. This lucrative revenue stream has been under assault from companies like Epic Games and Spotify. Spotify played a low-key yet effective role in shaping global antitrust regulators’ attitude toward Apple’s App Store monopoly.
The conflict between Spotify and Apple dates back to 2015 when Apple launched its rival music streaming service, Apple Music, at $9.99 per month—a discount compared to Spotify’s monthly subscription price of $12.99. Spotify executives viewed this as a direct assault, especially given the “Apple tax” that required them to share 30 percent of all App Store-derived sales with Apple.
In 2016, Spotify hired Horacio Gutierrez, a veteran antitrust lawyer from Microsoft, and submitted an updated version of its app. This new version prevented new users from purchasing subscriptions within the app; instead, they received emails offering discounts to upgrade to paid subscriptions. Apple rejected this update, prompting Spotify to send Gutierrez to Apple’s headquarters in Cupertino.
The meeting ended in a stalemate, with Gutierrez accusing Apple of undermining Spotify’s competitiveness and Apple responding by stating that Spotify was seeking exemptions from rules applied to all developers. While Apple eventually accepted the update after minor tweaks, relations between the two companies continued to deteriorate. Spotify failed to gain sympathy from U.S. regulators who were unwilling to challenge Apple at the time.
Gutierrez then shifted tactics, lobbying in the European Union (EU). He found a sympathetic ear in Margrethe Vestager, head of the EU’s antitrust regulator. A meeting between Vestager and Apple CEO Tim Cook ensued, often described as “the worst tech meeting” in Brussels, where Cook lectured Vestager on tax laws, which Europeans saw as an intimidation tactic.
Spotify provided evidence by instituting an A/B app update test that showed how Apple’s stringent rules constrained subscriptions by up to 20 percent compared to Google’s relaxed rules for Android apps. Spotify filed a complaint with the European Commission in March 2019.
The European Commission sided with Spotify, fining Apple €1.8 billion for its abusive anti-steering provisions. Apple is appealing this decision. Concurrently, Gutierrez and others pushed for EU antitrust rule reforms, leading to the Digital Markets Act in 2022. This act prohibited Apple from banning app developers who sought to direct European users towards off-app payment methods.
In 2025, Apple was fined $500 million for delaying compliance with the Digital Markets Act.
Despite these challenges, Apple under Tim Cook remains reluctant to relinquish its App Store monopoly. For instance, Apple continues to propose fees that aim to perpetuate the current status quo while claiming compliance with the EU’s Digital Markets Act.
