Spotify, Epic Games get ally in Musk in fight against Apple fees

[November 30, 2022]  By Supantha Mukherjee and Martin Coulter

LONDON (Reuters) - Elon Musk's declaration of war on Apple in a series of tweets on Monday gives Spotify and Fortnite maker Epic Games a powerful ally in taking the tech giant to task over its 30% App Store fees.

Musk criticized the fee Apple charges software developers for in-app purchases, and posted a meme suggesting he was willing to "go to war" rather than pay the levy. Musk also suggested Apple had threatened to block Twitter from its app store, although he did not explain why.

Spotify has previously submitted antitrust complaints against the iPhone-maker in Europe, and Epic Games sued Apple in the United States in 2020.

Since buying Twitter last month, Musk has unveiled plans to charge users $8 per month for getting verified on the social media platform to boost its profitability and avoid bankruptcy. A 30% cut on that would be a big dent to those plans.

The European Commission has been investigating whether Apple's rules for app developers violate its rules after Spotify filed an antitrust case against Apple in 2019.

Apple risks a fine as much as 10% of its global turnover if found guilty of breaching EU antitrust rules.
 

Luke Suddards, analyst at investment insights firm Finimize, said Apple was "playing a dangerous game" by threatening to pull Twitter from its App Store.

"If Twitter was kicked off, there could be another lawsuit developing. We saw Elon Musk use the courts effectively during his Twitter purchase and it would be no surprise if he pursued the same strategy now."

Smartphone with displayed Twitter logo is seen in front of Apple logo in this illustration taken, November 29, 2022. REUTERS/Dado Ruvic/

Earlier this month, "Fortnite" video game maker Epic Games asked a three-judge U.S. federal appeals panel to overturn portions of a lower court antitrust ruling that largely favoured Apple and its App Store payment business.

Apple had said the commissions it gets help it fund reviews of apps to ensure consumers are not exposed to fraudulent, pornographic or privacy-intrusive apps.

"Apple continues to disadvantage competitors, and the impact is huge - on consumers, app developers, and now, authors and publishers. Without policymakers taking action, nothing will change," Spotify CEO Daniel Ek wrote on Twitter last month.

Musk, who was in the process of buying Twitter at that time, wrote "concerning" in response to Ek's post.

But some analysts are concerned that going to battle with Apple might push more users away from Twitter.

"While Musk seeks to reignite the ongoing battle between Apple and developers, all of this negativity will drive Twitter users away," said Paolo Pescatore, an analyst with PP Foresight.

"People will not ditch their iPhones... They have been accustomed to signing up to different social services but only use one phone at a time," he said.

Apple, Twitter and Spotify did not immediately respond to requests for comment.

(Reporting by Supantha Mukherjee and Martin Coulter; Editing by Susan Fenton)

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