The European Union has imposed a €1.8 billion fine (equivalent to £1.6 billion) on Apple for breaching its competition regulations, by giving preferential treatment to its music streaming service over competitors.
The penalty was levied against the American technology firm for increasing the cost of music streaming for iPhone users by prohibiting applications like Spotify from advertising less expensive options.
Margrethe Vestager, head of competition for the European Commission, stated that Apple had exploited a dominant market position for ten years. This made it challenging for competitors of Apple Music to maintain a market presence.
This fine marks the first of its kind imposed by the EU on Apple. The European Commission accused Apple of implementing “anti-steering provisions” which barred applications such as Spotify from guiding users to more affordable subscriptions available outside of Apple’s app.
The inquiry into Apple’s practices commenced following a complaint lodged by Spotify five years earlier.
Apple imposes up to a 30% fee on music subscriptions purchased through its apps. Consequently, several streaming services have presented more economical options on their websites or discontinued offering subscriptions within apps.
Ms. Vestager commented, “For ten years, Apple has misused its market-leading position in the distribution of music streaming applications via the App Store by restricting developers from informing customers about alternative, more affordable music services outside the Apple ecosystem. This contravenes EU antitrust regulations, resulting in a fine exceeding €1.8 billion for Apple today.”
Apple contested the Commission’s decision, arguing that it failed to find any substantial evidence of harm to consumers and overlooked the reality of a flourishing, competitive, and rapidly expanding market.
The company highlighted Spotify’s collaboration with the Commission, noting their 65 meetings over eight years and pointing out Spotify’s Swedish origins. Apple plans to challenge the ruling.
