On Monday, Brussels fined Apple 1.84 billion euros ($2 billion) for prohibiting Spotify and other music streaming services from advising consumers of payment options outside its App Store. This is the iPhone maker’s first EU antitrust penalty.
European Commission’s decision
The European Commission’s decision was prompted by a 2019 protest from Swedish music streaming service Spotify about the restriction and Apple’s 30% App Store fees.
Unfair Trade
The European Union regulator stated that Apple’s limits constituted unfair trade conditions, a relatively new concept in an antitrust case that was also used by the Dutch antitrust agency in a 2021 verdict against Apple in a case brought by dating app providers.
The penalty dwarfs the 500 million euros that people familiar with the situation tolds the Commission planned to impose on Apple.
It included a fundamental element of 40 million euros, dubbed by European Competition Commissioner Margarethe Vestager as a “parking ticket” for the US tech giant, as well as a further 1.8 billion euros as a deterrence. The 1.84 billion euros is 0.5% of Apple’s global revenue, she claimed.
Apple blasted the EU ruling, stating that it will contest it in court. A decision from Europe’s second-highest court, the General Court in Luxembourg, is expected to take several years. Until then, Apple must pay the fine and comply with the EU regulation.
“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,” it stated.
“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,” it said.
High Comission Fees
Vestager stated that this was the first occasion the Commission has added a deterrent lump sum to an antitrust sanction.
“Millions of European music streaming users were left in the dark about all available options,” she told a press conference.
“And Apple’s anti-steering rules also made consumers pay more for such services because of the high commission fee imposed on developers and passed on to consumers.”
Vestager ordered Apple to remove the anti-steering measures and to avoid similar actions in the future.
Spotify claimed it does not pay Apple a commission because it sells subscriptions on its website rather than the App Store. Spotify welcomed the EU ruling, but noted that there were other difficulties in other sectors.
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