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A report indicated that the companies behind popular mobile apps helped push Spotify (SPOT 1.54%) stock higher on Tuesday. The share price of the music service operator, whose app is enduringly popular on mobile platforms, rose by 1.5% on the day, more than double the percentage rate gain of the S&P 500 index.
In an article published this mid-afternoon and updated shortly before market close, Bloomberg wrote that Apple (AAPL 0.68%) is gearing up to allow third-party app stores on its devices. Citing “people familiar with the matter,” the news agency said this is being done as part of a wider effort by Apple to comply with upcoming changes in the European Union’s Digital Markets Act.
Currently, Apple has a tight grip on its App Store. It is the only company-authorized channel through which iPhone and iPad users can buy and download apps. Third-party developers have complained vociferously at times about this, with some characterizing it as a monopolistic practice. The tech giant has also come under fire for charging a standard, rather hefty 30% fee for every sale effected through the platform.
If enacted, Apple’s change would undoubtedly affect some of the top outside app developers, with Spotify being one of them. This is compounded by the fact that the highest proportion (33%) of the Sweden-headquartered company’s monthly average users are based on the continent.
Europe is also a crucial market for Apple, so it’s important to keep regulators there sweet. In the company’s last fiscal year, it generated $95 billion from the continent’s consumers, which comprised nearly one-quarter of the total. It also made the region the second-most significant for Apple, next to the U.S. in terms of sales.
Eric Volkman has positions in Apple. The Motley Fool has positions in and recommends Apple and Spotify Technology. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
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