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Spotify Technology SA‘s (NYSE:SPOT) second attempt to update its iOS app in the EU has been thwarted by Apple Inc. (NASDAQ:AAPL) due to non-compliance with its App Store rules.
What Happened: The update for Spotify’s app in the App Store has been put on hold as the streaming service failed to adhere to the regulations allowing links to external sites for purchases, reported AppleInsider on Wednesday.
Apple has introduced new rules for developers to comply with EU legislation, such as the Digital Markets Act. However, not all apps have followed these guidelines.
Apple has created a Music Streaming Services Entitlement for the EEA storefronts, which allows streaming services to use external links, buttons, and calls to action to direct users to a developer’s website for purchases outside of Apple’s In-App Purchase mechanism.
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The App Review team at Apple sent an email to Spotify, stating that version 8.9.33 of Spotify’s app was stopped from being published to the App Store. This version of the app was designed for the European Economic Area or EEA storefronts.
“We note that your current submission includes a call to action to purchase a Spotify subscription on your website. As such, you must accept the terms of the Music Streaming Services Entitlement (EEA) and include the entitlement profile in your app for submission,” the email read.
Adding, “To be clear, this entitlement is required even if your app does not include an external link (nor does it require that you offer an external link). We will, however, approve version 8.9.33 after you accept the terms of the Music Streaming Services Entitlement (EEA) and resubmit it for review.”
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It is unclear if the app will be blocked in other territories, but since it is an EEA-specific issue, it should be allowed elsewhere.
Why It Matters: This development comes after Spotify’s record-breaking first quarter in 2024, where the company reported a 20% year-over-year increase in revenue to 3.64 billion euros. This was attributed to efficient cost-cutting initiatives that also brought significant margin improvements.
Spotify’s stock, however, shed all its gains after the first quarter earnings report, but analysts were still impressed with the company’s performance. J.P. Morgan analyst Doug Anmuth maintained Spotify with an Overweight and raised the price target from $320 to $365.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
