Spotify (NYSE:SPOT), the audio streaming app, gained in trading after it announced that it would allow in-app purchases of subscriptions and audiobooks on Apple’s (NASDAQ:AAPL) iPhones in the European Union. The company is making this change as the Digital Markets Act (DMA) comes into effect in the EU starting from March 7.
The EU’s DMA aims to make digital markets fairer by identifying and regulating “gatekeepers.” The EU identifies gatekeepers as large platforms offering core services, such as online search engines, app stores, and messenger services. The DMA stipulates that such gatekeepers must adhere to obligations and prohibitions outlined in the act.
According to Spotify, with the DMA coming into effect on March 7, the company can give its users more details about its subscription offerings, upgrades, deals, and audiobook prices then. Moreover, Spotify’s users would be able to make their in-app purchases without the 30% tax that is imposed by AAPL.
According to Apple’s current App Store rules, developers such as Spotify must bill their customers through its App Store billing service, which takes a 30% commission.
Is SPOT a Good Stock to Buy?
Analysts remain cautiously optimistic about SPOT stock with a Moderate Buy consensus rating based on 17 Buys, seven Holds, and one Sell. Over the past year, SPOT stock has surged by more than 100%, and the average SPOT price target of $213.95 implies an upside potential of 1.5% at current levels.
