Apple’s App Store pulled in only about 8 percent of the company’s total revenue in 2024, yet it delivered operating margins north of 75 percent, according to public court records. That outsized profitability has made the App Store a lucrative cornerstone of Apple’s services strategy—and a prime target for rivals and regulators.
The biggest pushback has come from Epic Games and especially Spotify, which helped shape how global antitrust watchdogs view Apple’s grip on mobile app distribution and payments. The rivalry traces back to 2015, when Apple launched Apple Music at $9.99 per month, undercutting Spotify’s $12.99 App Store subscription, a price inflated by the 30 percent commission often dubbed the Apple tax.
Spotify’s response was tactical. In 2016, after hiring veteran antitrust lawyer Horacio Gutierrez, the company submitted an app update that removed in-app subscription sign-ups for new users and instead directed them to upgrade via email at a discount. Apple rejected the update, triggering a high-stakes standoff. Gutierrez confronted Apple’s then–top lawyer Bruce Sewell, accusing Apple of hobbling Spotify’s competitiveness. Apple fired back that Spotify was asking for special treatment outside the rules all developers must follow. Apple eventually allowed the update after a minor tweak, but the relationship continued to sour, and U.S. regulators showed little appetite for a fight at the time.
The battleground shifted to Europe. Gutierrez found an ally in Margrethe Vestager, the EU’s antitrust chief. A tense meeting in Brussels between Vestager and Tim Cook reportedly went poorly, with European officials viewing Apple’s tone as heavy-handed. Spotify then ran an A/B test to quantify the impact of Apple’s rules, showing subscription conversions were up to 20 percent lower under Apple’s policies compared to Google’s looser approach on Android. Spotify filed a formal complaint in March 2019. After a lengthy probe, the European Commission sided with Spotify and levied a 1.8 billion euro fine on Apple, which Apple is appealing.
Policy changes soon followed. The EU passed the Digital Markets Act in 2022, barring gatekeepers like Apple from blocking developers who steer users to alternative payment options. When Apple dragged its feet on compliance, it faced another penalty in 2025—this time a $500 million fine for delays.
Even now, Apple appears intent on preserving the App Store’s moat. While pledging to comply with EU rules, the company has proposed new fee structures that critics say keep the status quo intact under a different name. For Apple, the stakes are clear: the App Store may not be its biggest revenue stream, but it is among its most profitable. For developers and consumers, the outcome will shape how apps are distributed, priced, and paid for across one of the world’s most valuable digital ecosystems.
