The European Union has levied a hefty fine of €1.84 billion ($2 billion) against Apple for breaching its competition laws, marking the EU’s first-ever antitrust penalty on the US tech giant. The fine stems from Apple’s alleged prevention of rival music streaming services, such as Spotify, from informing iPhone users about cheaper subscription options available outside of Apple’s app store.
Margrethe Vestager, the EU’s competition and digital chief, accused Apple of “abusing its dominant position” as a distributor of music streaming apps, thereby depriving European consumers of the freedom to choose where and at what prices they purchase music streaming subscriptions. Apple’s restrictive policies, which prohibit app developers from fully informing iOS users about cheaper subscription alternatives outside of the app store, were cited as the primary reason for the fine.
In response to the EU’s decision, Apple defended its practices, stating that the Commission failed to uncover credible evidence of consumer harm and disregarded the market’s competitive dynamics. The company asserted that app developers compete on an equitable basis within Apple’s app store and announced its intention to appeal the fine.
To deter future antitrust violations by Apple and other tech giants, the European Commission added a lump sum of €1.8 billion to the basic fine, equivalent to 0.5% of Apple’s worldwide annual turnover. Vestager emphasized that dominant companies engaging in illegal practices would face consequences, likening the basic fine to a mere “parking ticket” for Apple.
The EU’s investigation into Apple was prompted by a complaint filed by Spotify in 2019, alleging unfair treatment by Apple in the app store ecosystem. Spotify accused Apple of imposing a 30% fee on purchases made through its in-app payment system while exempting its own service, Apple Music, from the fee. Additionally, Spotify claimed that Apple restricted it from communicating subscription deals to iPhone users.
Apple’s announcement of changes to its app store policies in January, including the allowance of third-party app stores on iPhones and iPads, came ahead of the enforcement of new EU regulations under the Digital Markets Act.
Despite Apple’s claims of Spotify being the “biggest beneficiary” of the EU’s fine, Spotify hailed the decision as a victory against abusive market practices, emphasizing the importance of fair competition in the digital landscape.