Apple hit with landmark $2 bn fine by EU for breaching antitrust regulations
The European Commission has levied a hefty fine of over €1.8 billion against US tech giant Apple Inc. for breaching antitrust regulations concerning its App Store’s distribution of music streaming apps to iPhone and iPad users within the European Economic Area (EEA). The Commission found that Apple’s practices constituted an abuse of its dominant market position.
At the core of the issue are the restrictions imposed by Apple on app developers, preventing them from informing iOS users about alternative and potentially cheaper music subscription services available outside the App Store. These restrictions, referred to as ‘anti-steering provisions,’ were deemed illegal under EU antitrust rules.
“Apple’s conduct, which lasted for almost ten years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions because of the high commission fee imposed by Apple on developers and passed on to consumers,” the EU’s powerful antitrust regulator said.
Spotify’s complaint in 2019 triggered a broad commission investigation into the iPhone maker in 2021, but Brussels narrowed its probe last year to focus on Apple’s actions to prevent apps from giving users information about rival music subscription options.
“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” commission vice president Margrethe Vestager said in a statement.
“We have ordered Apple to remove the necessary provisions and to refrain from similar practices in the future,” Vestager told reporters.
Apple slammed the commission’s decision and said it would appeal.
“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,” Apple said in a statement.
“While we respect the European Commission, the facts simply don’t support this decision. And as a result, Apple will appeal,” the company added.
Apple’s tight control over the App Store, the sole platform for developers to reach iOS users across the EEA, gives it a significant advantage in dictating terms and conditions to developers. The Commission’s investigation revealed that Apple effectively prohibits music streaming app developers from fully disclosing alternative subscription services and from providing instructions on how users can subscribe to them.
By limiting information about alternative options, Apple potentially maintains higher prices for its own services while hindering potential rivals from offering competitive alternatives.
