Starting in March, Spotify users in Europe will be able to purchase audiobooks and subscription plans directly within the music-streaming app. This move comes owing to the region’s new competition law for Big Tech, which Spotify announced on Wednesday. By offering in-app purchases, Spotify aims to bypass Apple’s 30% fee for purchases made through its App Store. This fee has been a contentious issue between app developers and Apple.
Background on Legal Battle and Price Increase for Spotify
Spotify, headquartered in Stockholm, has been involved in a long-standing legal battle. As a result, the company claimed it raised monthly subscription prices to cover the costs associated with Apple’s App Store regulations. The company alleges that Apple’s rules have imposed financial burdens on Spotify. The news of Spotify’s ability to offer in-app purchases in Europe resulted in a roughly 2% increase in the company’s U.S.-listed shares.
Relief with the Digital Markets Act (DMA)
In a blog post, Spotify expressed its relief with the new Digital Markets Act (DMA). In addition, it requires major tech firms to comply by March 7. The DMA mandates that companies treat their own products and services in the same manner as they do those of their competitors.
Apple’s Response and Legal Challenges
Apple intends to challenge the European Union’s decision to include the entire App Store in the bloc’s new digital antitrust list. In November, Apple seeks to dismiss a collective lawsuit amounting to approximately US$ 1 billion. As a result, it will represent over 1,500 app developers over its App Store rules.
Concerns Raised by the Society of Authors for Spotify
The Society of Authors (SoA) has expressed deep concern about Spotify’s new audiobook provision. The industry body cited the devastating effect that music streaming has had on artists’ incomes and expressed fears that authors may suffer in a similar way. The streaming of audiobooks competes directly with sales. In addition, books are likely to be more harmful than music streaming. This is due to the fact that they are usually only read once. However, users stream music multiple times.
Audiobook Offering of Spotify
Spotify has been expanding its audiobook offering. In addition, it is making more than 150,000 audiobooks available as part of Spotify Premium subscriptions. Initially, each Premium individual and plan manager for Family and Duo accounts will have 15 hours of listening per month. As a result, it will allow them to enjoy as many titles as they want within that monthly allocation.