Apple Fined $1.95 Billion by EU for Music Streaming Antitrust

Apple has been fined $1.95 billion by the European Union after the bloc’s executive body, the European Commission, found the iPhone maker in violation of antitrust law by using its App Store market dominance to stifle music streaming competition. The EC found that Apple suppressed the ability of app developers to communicate with iOS users about alternative music subscription services available outside the App Store. The fine stems from a 2019 complaint from Spotify that triggered an investigation into Apple. Spotify hailed the result as a win for consumers and “an important moment in the fight for a more open Internet,” while Apple has vowed to appeal.

The probe initiated by the Spotify complaint eventually focused on “contractual restrictions that Apple imposed on app developers which prevent them from informing iPhone and iPad users of alternative music subscription services at lower prices outside of the App Store,” CNBC reports.

The result is Apple’s first antitrust fine from Brussels and one of the largest the EU has imposed on a tech firm, though “Google has faced larger fines — of €4.34 billion and €2.42 billion — in two separate cases that the tech company has appealed,” according to The Wall Street Journal.

“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” said European Commission EVP in charge of competition policy Margrethe Vestager in an announcement, adding that Apple’s actions to restrict developers from informing consumers about competing services “is illegal under EU antitrust rules.”

“The Commission said it took into account the ‘duration and gravity of the infringement’ when setting the fine, as well as Apple’s total turnover and market capitalization, while also factoring in ‘incorrect information’ submitted by Apple during the administrative procedure,” according to The Verge.

“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,” Spotify said in a press release.

The New York Times describes the action as “the latest in a series of regulations and penalties to target the App Store,” most focused on the fact that “Apple requires that apps use its in-app payment service for sales,” taking up to a 30 percent commission per transaction.

“Regulators in the Netherlands and South Korea have passed laws or orders to force Apple to allow alternative payment services, but Apple has largely disregarded the regulators’ challenges,” writes NYT, noting that those battles continue.

U.S. Funding Deal Delivers Blow to DOJ Antitrust Probes of Apple, Ticketmaster, Bloomberg, 3/4/24
Apple Gets Squeezed by Antitrust Regulators on Both Sides of the Atlantic, Yahoo! Finance, 3/4/24
Apple Revises Its DMA Rules After Pressure, but Keeps the Core Technology Fee Intact, TechCrunch, 3/5/24

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