Spotify (SPOT) has officially received the go-ahead from Apple (AAPL) to showcase its pricing information directly on its iOS app for users in the European Union (EU). This decision comes after a lengthy legal battle, during which Apple initially refused Spotify’s request to display this crucial information.
AAPL’s Approval Comes After Fine from EU Regulators
The approval follows Apple’s introduction of the “Music Streaming Services Entitlement” terms in the EU. These new regulations emerged after Apple faced a hefty €1.84 billion ($2 billion) fine earlier this year from EU regulators for “abusing its dominant position” in the music streaming sector. The Music Streaming Services Entitlement allows streaming apps in the European Economic Area (EEA) to provide users with pricing information and promotional offers directly within the app. However, it only permits linking to external purchase options in a limited way, such as asking users to share their email for links, without including a direct clickable link.
Spotify Accepts Apple’s Terms
While Spotify has agreed to comply with these new terms, it will not provide direct purchase links within its app to avoid a steep 27% commission fee charged by Apple. Instead, Spotify’s app will update to include pricing details, promotional offers, and subscription costs, but will refer users to the company’s website without specifying “spotify.com.”
Spotify has criticized Apple’s policy as “illegal and predatory,” arguing that it imposes unfair financial burdens on streaming services. The streaming giant’s choice to skip direct purchase links shows it’s still pushing back against Apple’s commission fees, proving that the clash between these tech giants isn’t over yet.
Is Spotify Stock a Buy Right Now?
Analysts remain bullish about SPOT stock, with a Strong Buy consensus rating based on 22 Buys, five Holds, and one Sell. Over the past year, SPOT has surged by more than 100%, and the average SPOT price target of $392.80 implies an upside potential of 17.7% from current levels.
