European Commission Fines Apple $1.95 Billion For Antitrust Practices Towards Spotify
After an extensive investigation, the European Commission has imposed a substantial fine of €1.8 billion, equivalent to about $1.95 billion, on tech giant Apple. The commission found Apple guilty of "abusing its dominant position on the market for the distribution of music streaming apps" concerning iPhone and iPad users. This decision follows a complaint filed by Spotify, which...
After an extensive investigation, the European Commission has imposed a substantial fine of €1.8 billion, equivalent to about $1.95 billion, on tech giant Apple. The commission found Apple guilty of "abusing its dominant position on the market for the distribution of music streaming apps" concerning iPhone and iPad users. This decision follows a complaint filed by Spotify, which initiated the inquiry into Apple's business practices.
The European Union alleges that Apple placed restrictions on app developers, preventing them from informing iOS users about alternative and more cost-effective music subscription services available outside the App Store. Such restrictions are deemed illegal under EU antitrust rules.
What Apple Did: Antitrust Violations and Restrictions on App Developers
The investigation revealed that Apple imposed anti-steering provisions on app developers, hindering them from communicating information about alternative and cheaper music subscription services directly to iOS users. In response, the EU ordered Apple to eliminate these provisions and refrain from engaging in similar practices in the future. EU's top antitrust official, Margrethe Vestager, emphasized the need for Apple to open its ecosystem, enabling end-users to easily discover, pay for, and use apps on any device without restrictive practices.
What Apple Says?
In a swift response, Apple expressed its intention to appeal the EU's decision, asserting that Europe's digital music market is thriving. The tech giant contested the EU's findings, stating that the investigation failed to uncover any credible evidence of consumer harm. Apple defended its position, highlighting the success of Spotify, claiming a 56% share of Europe's music streaming market. Apple argued that Spotify's growth was facilitated by the App Store and its tools, playing a key role in supporting the success of various developers.
How Spotify Responded?
Spotify, the complainant in this case, lauded the European Commission's ruling as a powerful message against abusive market practices. The streaming service emphasized the importance of consumers having access to information about various options and making their purchasing decisions independently. Spotify contended that Apple's rules hindered communication with users about upgrades, subscription prices, promotions, and discounts. The company celebrated the decision as a win for free markets, asserting that customers, not Apple, should decide what, when, and how to buy.
This recent fine is not an isolated incident but part of a broader conflict between Apple and the European Commission. The ongoing war includes clashes over Apple's compliance with the Digital Markets Act (DMA), with the EU imposing fines and Apple contesting them. The next steps in this conflict remain uncertain, with the Commission likely to investigate Apple's new "core technology fee" and potential charges related to it.
In recent weeks, Apple has made strategic moves, such as announcing compliance with the DMA's demand for third-party iPhone app stores. However, the company introduced a new "core technology fee," leading to criticism from affected companies like Microsoft, Meta, Epic Games, and Spotify. Apple's reversal on web apps and subsequent statements indicate the challenges and uncertainties it faces in navigating the evolving regulatory landscape. With the DMA taking effect, Apple's actions will likely continue to be closely monitored, setting the stage for further confrontations with the European Commission.