The European Union (EU) on Monday fined Apple Inc. €1.8 billion after an investigation into allegations that it silenced music-streaming rivals, including Spotify Technology SA, on its platforms.
The European Commission also ordered the Cupertino, California-based firm to stop preventing music-streaming apps from informing users of cheaper deals away from Apple’s App Store.
Apple has, however, rejected the EU’s fine, saying in a statement that regulators failed to “uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast.”
Allegations against Apple
Commenting on the decision of the EU after the investigation, EU antitrust chief, Margrethe Vestager said:
- “For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store.
- “They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem.”
The EU crackdown on Apple’s App Store has run alongside sweeping new rules aimed at heading off market abuses before they take root. Under the Digital Markets Act, which comes into full effect this week, it’ll be illegal for the most powerful tech firms to favor their own services over their rivals.
Companies will be barred from combining personal data across their different services and from using data they collect from third-party merchants to compete against them. They will also have to allow users to download apps from rival’s platforms.
The rules come into full force March 7 and Apple has also challenged its designation under the new regime.
What Apple is saying
Reacting to the fine, Apple in a statement released on Monday said Spotify, which is the biggest beneficiary of the EU decision has been making money off the App Store without paying anything for the services provided by the App Store.
- “Today, the European Commission announced a decision claiming the App Store has been a barrier to competition in the digital music market.
- “The decision was reached despite the Commission’s failure to uncover any credible evidence of consumer harm and ignores the realities of a market that is thriving, competitive, and growing fast.
- “The primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden. Spotify has the largest music streaming app in the world and has met with the European Commission more than 65 times during this investigation.
- “Today, Spotify has a 56 percent 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 recognizable brands in the world.
- “A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world,” Apple stated.
What you should know
The EU’s investigation was sparked by a complaint nearly five years ago from Spotify, which claimed it was forced to ramp up the price of its monthly subscriptions to cover costs associated with Apple’s alleged stranglehold on how the App Store operates.
Apple’s fine came as the latest in the series of decisions of the EU antitrust body aimed at dismantling Big Tech’s dominance in the bloc through fines and regulatory actions.
Earlier, Vestager had slapped Alphabet Inc.’s Google with penalties of more than €8 billion and also ordered Apple to repay €13 billion in allegedly unfair tax breaks from Ireland.
