Everyone is likely aware that Spotify can be enjoyed for free, albeit with ads. For an uninterrupted experience, a subscription to Premium is necessary. However, if you’ve attempted to sign up for Spotify Premium on an iPhone, you might have realized that an option to subscribe was notably absent—no “pay now” button or any link guiding you to the subscription process elsewhere.

Understanding the Apple Fee Structure

The reason behind this absence stems from Spotify’s reluctance to share a significant portion of its revenue—15–30%—with Apple. This is how the App Store ecosystem operates, affecting both Apple and Google alike. Any in-app transactions on iPhones result in a commission for Apple, ranging from 15% to 30%, contingent upon the app’s earnings or subscription duration.

However, if users opt to sign up for Spotify Premium outside the application—say, through Safari—Spotify retains the entirety of the payment. Apple is aware of this workaround, hence the company has historically prohibited apps from linking to external payment options. Their stance is clear: if developers want users to pay directly, they must either route through the app and incur fees or hope the users discover alternatives on their own.

While Spotify included a Premium tab for users, it merely informed free users about the subscription service, hinting that they had to switch to a web browser for enrollment. The app even acknowledged the inconvenience but carefully avoided laying the blame solely on Apple.

New Directions for Payments

This week heralded a significant change: Judge Yvonne Gonzalez Rogers determined that Apple cannot obstruct developers from guiding their users to external websites for payments or levying fees on transactions made outside the application. This ruling means Spotify and similar applications can now enhance their platforms, allowing links that direct users to their own sites for payment and subscription processes.

Apple has stated that it will adhere to the ruling while simultaneously planning an appeal. For the time being, the situation seems favorable for developers, as Apple has already approved the latest update from Spotify. Now, upon visiting the Premium tab within the app, users are greeted with various options for subscriptions.

This decision was not unforeseen, arising from the ongoing antitrust litigation brought forth by Fortnite‘s creator, Epic Games, against Apple. While Judge Rogers disagreed with the majority of Epic’s assertions in a 2021 ruling, she did mandate that Apple allow developers to inform clients about third-party payment alternatives. Apple attempted to solidify its stance by introducing new charges on external purchases and deploying messages to discourage users from seeking alternatives. Judge Rogers expressed her dissatisfaction, taking Apple executives, including CEO Tim Cook, to task, and found Apple in civil contempt of court. There are also indications that Apple may face criminal contempt investigations.

Despite Apple’s challenging court day, platforms like Spotify are likely reveling in this development. Anticipate an increase in external payment options across apps, and perhaps even lower prices for these services, as businesses find it easier to guide customers away from Apple’s in-app purchase system. Nonetheless, Spotify’s pricing structure remains unchanged; it has not facilitated in-app payments previously, and Premium will keep its current pricing.