EU Policy. Apple hit with €1.8 billion EU antitrust fine over music streaming

Apple was already hit with a similar fine in France.
Apple was already hit with a similar fine in France. Copyright Kathy Willens/Copyright 2020 The AP. All rights reserved.
By Cynthia Kroet
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The European Commission started investigating following a complaint by Spotify in 2019.

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US tech giant Apple has been ordered to pay a fine of €1.8bn for abusing its dominant position on the market for the distribution of music streaming apps to iPhone and iPad users, the European Commission said today (4 March). 

The company applied restrictions on app developers preventing them from using cheaper music subscription services outside of the app, the investigation found.

"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. This is illegal under EU antitrust rules, so today we have a fine," Commission Vice-President Margarethe Vestager said.

“Some consumers may have paid more – because they were unaware. Others might not have been able to find alternatives. We consider them to be unfair trading conditions,” Vestager added.

Apple now needs to remove these conditions and refrain from this in the future, in addition the tech giant must allow developers to communicate with their users.

In a response to today’s fine, Apple said in a statement that it will appeal.

“We’ve helped markets thrive, promoting competition and innovation at every turn — and the App Store is an important part of that story. So while we respect the European Commission, the facts simply don’t support this decision. And as a result, Apple will appeal,” it said.

Spotify

The EU executive started probing allegations into Apple for obstructing other music services on its devices after Swedish music streaming company Spotify filed a formal complaint in 2019.

Spotify claimed that Apple limited choice and competition in its app store by charging a 30% fee on all purchases, and by preventing others from informing customers that they could avoid the extra fees by signing up on Spotify’s website.

According to Apple’s statement Spotify has grown its company into the largest digital music business in the world.

“Despite that success, and the App Store’s role in making it possible, Spotify pays Apple nothing. That’s because Spotify — like many developers on the App Store — made a choice. Instead of selling subscriptions in their app, they sell them on their website. And Apple doesn’t collect a commission on those purchases,” it said.

Spotify, in turn, said in a reaction that the commission decision is "an important moment in the fight for a more open internet for consumers."

"The European Commission has made its conclusion clear: Apple’s behaviour limiting communications to consumers is unlawful. 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," it added. 

Fines

The company, which has never been hit by such an infringement penalty by the commission, also received a €1.1bn fine in France for alleged anti-competitive behaviour in 2020, which was lowered to €372m after it appealed.

The fine comes as so-called gatekeepers, companies including Apple, Amazon and Google, need to comply with the EU’s Digital Markets Act on 7 March. These rules require the largest tech companies to share information about their services with their competitors.

Vestager said that she hopes that the DMA will speed up investigations such as the Apple case.

This story has been updated with a comment from Spotify.

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