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The fine is the Apple’s first antitrust fine and is one of the largest given to a technology company by the European Commission (EC)
This week, the EC –the executive arm of the European Union (EU) – has given Apple a €1.8 billion antitrust fine for abusing its dominant position in the music streaming market.
The fine relates to an investigation that began in 2019, in which the EC found that Apple had placed restrictions on other app developers that prevented them from informing iOS users of cheaper or alternative music subscription services that are available outside the app. This limitation is illegal in the EU under antitrust rules.
The EC investigation was triggered by a complaint from Spotify, who were displeased with both the aforementioned restrictions as well as the 30% fee that Apple applies to apps and in-app purchases. Technically speaking, this 30% fee can be avoided by consumers if the purchase is not made through the app, but communicating this fact to customers via an Apple app or contacting them directly is prohibited, the EC says.
Appl’s streaming service, Apple Music, is obviously not subject to the same additional fees, although it must be noted that Spotify does not sell its subscriptions through the App store.
The European Commission have conclusively ruled that Apple’s actions “negatively affect the interests of iOS users”, who are unable to make informed decisions on where and how to purchase their music streaming services. As a result, many iOS users have been unknowingly paying higher prices for their subscriptions for nearly a decade.
Margrethe Vestager, Executive Vice-President of the EC, said that, in short, “Apple’s rules ended up in harming consumers”.
“Apple’s behaviour limiting communications to consumers is unlawful. This decision sends a powerful message—no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers,” said Spotify in a statement following the fine’s announcement.
Apple, who are unsurprisingly unhappy with decision, said in a statement that they will appeal the EC’s decision.
“Today, Spotify has a 56%share of Europe’s music streaming market — more than double their closest competitor’s — and pays Apple nothing for the services that have helped make them one of the most recognisable brands in the world,” said the statement.
Apple claims that Spotify wants “to rewrite the rules of the App Store – in a way that advantages them even more”, by allowing them to make even more sales via their website, thereby avoiding Apple commission. Apple says that Spotify wants to bend the rules by embedding its subscription process into their app without using Apple’s In-App purchasing system.
“They want to use Apple’s tools and technologies, distribute on the App Store, and benefit from the trust we’ve built with users – and to pay Apple nothing for it,” Apple’s statement continued.
As the UK is no longer in the European Union (EU), the EU will reimburse the UK for its share of the fine collected by the EU, because the case began when the UK was still in the transition period of leaving.
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