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

LONDON, Nov 29 (Reuters) – Elon Musk’s declaration of war on Apple (AAPL.O) in a series of tweets on Monday gives Spotify and Fortnite maker Epic Games a strong ally when it comes to charging the tech giant over its 30- owned App Store to challenge fees.

Musk criticized the fee Apple charges software developers for in-app purchases and posted a meme implying he was willing to “go to war” rather than pay the levy. Musk also suggested Apple threatened to ban Twitter from its App Store, although he didn’t explain why.

Spotify has previously filed antitrust complaints against the iPhone maker in Europe, and Epic Games has sued Apple in the US in 2020.

Since buying Twitter last month, Musk has revealed plans to charge users $8 a month for verification on the social media platform to increase profitability and avoid bankruptcy. A 30% cut would be a big damper on those plans.

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

Apple risks a fine of up to 10% of its global sales if found guilty of violating EU antitrust rules.

Luke Suddards, an analyst at investment insight firm Finimize, said Apple was playing “a dangerous game” by threatening to remove Twitter from its app store.

“If Twitter were taken down, another lawsuit could develop. We’ve seen Elon Musk use the courts effectively during his Twitter buy and it wouldn’t be a surprise if he uses the same strategy now.”

Earlier this month, “Fortnite” video game maker Epic Games asked a three-judge federal appeals panel to overturn portions of a lower court antitrust ruling that largely favored Apple and its App Store payments business.

Apple had said the commissions it receives help it fund app reviews to ensure consumers aren’t exposed to fraudulent, pornographic, or privacy-invasive apps.

“Apple continues to put competitors at a disadvantage, and the impact is huge — on consumers, app developers, and now authors and publishers. Nothing will change without policy action,” Spotify CEO Daniel Ek wrote on Twitter last month.

Musk, who was in the process of buying Twitter, wrote “concerning” in response to Ek’s post.

However, some analysts worry that the battle with Apple could lure more users away from Twitter.

“As Musk tries to reignite the ongoing battle between Apple and developers, all of this negativity will drive Twitter users away,” said Paolo Pescatore, analyst at PP Foresight.

“People aren’t going to throw away their iPhones… They’re used to logging into different social services but only using 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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