Proposed EU law changes how Apple deals with smaller rivals

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Spotify
If an EU law goes into effect, a dispute between Apple and Spotify over subscription fees would go to mediation.
Photo: Jim Merithew/Cult of Mac

Spotify objects to Apple collecting a share of all the subscription fees paid by iOS users.  A law proposed today in European Union would force Apple and Spotify into mediation on this issue.

And it’s not just Spotify. Under the proposal, Apple, Google, and other tech giants would have to appoint mediators in all their disagreements with smaller companies.

Forcing Apple and Spotify into talks

Apple takes 30 percent of every software and subscription purchase made through the App Store. Spotify claims this is unfair because the iPhone maker runs a competing streaming service, Apple Music. The two are in intense competition, fighting to see who’ll lead this market.

Spotify took its concerns to the EU because its headquarters is in Stockholm, Sweden.

Mediation for everyone

To be clear, the proposed law doesn’t say anything about whether it’s fair for Apple to take 30 percent of Spotify’s subscription fees. Instead, the law would force Apple to stop ignoring its smaller rival’s complaints. A mediator would settle the issue.

The same is true for other disagreements that come up between small companies and tech giants. They would have to go to mediation, and the larger enterprises would have to pay at least half the fees. 

“Platforms and search engines are important channels for European businesses to reach consumers but we must make sure they are not abusing their power, and thus bring harm their business users,” said Mariya Gabriel, the EU’s Commissioner for the Digital Economy and Society according to Reuters.

The proposed law would have to pass the European Parliament before going into effect.