In a significant move, the European Union (EU) has fined Apple $1.95 billion for violating European antitrust rules concerning music streaming. Spotify, one of Apple’s main competitors, has welcomed the decision. It sends a powerful message that no company, even a monopoly like Apple, can misuse its power to control how other companies interact with their customers.
The European Commission has determined that Apple’s restrictions on consumer communication are illegal. Their investigation revealed that Apple contravened antitrust regulations by prohibiting developers of music streaming apps from thoroughly enlightening iOS users regarding more economical subscription options outside the app. Furthermore, Apple barred developers from guiding customers on how to subscribe to these alternatives. The EU’s antitrust authority declared that such behavior constitutes an abuse of Apple’s dominant market position, as it confines users of Apple devices to the company’s own services and payment systems. This action violates EU antitrust laws.
The penalty levied against Apple by the EU Commission is almost quadruple the anticipated amount. The Commission highlighted that Apple’s conduct has restricted consumers’ freedom to make educated buying decisions for over ten years. There is a prevailing belief that these actions likely led to consumers facing inflated costs for music streaming subscriptions, attributable to the substantial commission fees Apple charges developers.
The case against Apple began in 2019 when Spotify, a Swedish music streaming service, complained to European officials regarding the restrictions and the 30 percent commission charged by Apple on the App Store. In response to the fine, Apple has stated that it will challenge the decision, arguing that there is no evidence to suggest that consumers have been harmed.
In addition to the fine, Apple must eliminate anti-steering policies that guide consumers away from competing services. Moreover, the company must avoid any recurrence of the violation or the implementation of comparable tactics going forward.
Margrethe Vestager, the Executive Vice President overseeing competition policy at the European Commission, condemned Apple for exploiting its market dominance in distributing music streaming applications via the App Store. She stressed that Apple constrained developers from alerting consumers to more affordable music service options beyond the Apple ecosystem, thus breaching EU antitrust regulations.
