Apple was fined almost $2 billion by the European Union on Monday for violating the bloc's competition regulations by preferring its own music streaming service over rivals'. This was the EU's first antitrust penalty against the American tech giant.
(Photo : by Justin Sullivan/Getty Images)Apple was fined almost $2 billion by the European Union on Monday for violating the bloc's competition regulations by preferring its own music streaming service over rivals'. This was the EU's first antitrust penalty against the American tech giant.
App developers are prohibited by Apple from "fully informing iOS users about alternative and cheaper music subscription services outside of the app," according to the European Commission, which is the executive body of the 27-nation union and its principal antitrust prosecutor.
That is prohibited under EU antitrust laws. Since Apple acted in this manner for over ten years, many customers had to pay "significantly higher prices for music streaming subscriptions," according to the commission.
The lengthy inquiry that was started five years ago by a complaint from the Swedish streaming provider Spotify resulted in the 1.8 billion euro punishment.
Reuters quoted Apple's statement, in which it said, "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 pledged to challenge the punishment in court.
"The main proponent of this decision and the principal beneficiary is Spotify. ... Spotify, the largest music streaming app globally, has engaged in over 65 meetings with the European Commission throughout this investigation," stated the report.
The EU has spearheaded global initiatives aimed at regulating Big Tech firms, such as imposing multibillion-dollar fines on Google and accusing Meta of distorting the online classified ad market. Additionally, the commission has initiated a separate antitrust inquiry into Apple's mobile payments service, prompting the company to pledge opening its tap-and-go mobile payment system to competitors as part of a resolution.
Initially, the commission's examination was focused on two issues. One was the iPhone manufacturer's policy of making in-house payment processor, which levies a thirty percent commission on all subscriptions, mandatory for app developers selling digital content.
However, the EU eventually abandoned that in favor of concentrating on Apple's prohibition against app developers informing their customers of less expensive alternatives to paying for subscriptions that don't go via an app.
According to the inquiry, Apple has prohibited streaming services from informing users about the costs of subscription packages that aren't within their applications, including buttons within the apps that allow users to pay for other subscriptions or even sending customers emails with information about other pricing alternatives.
The sanction is imposed in the same week that EU regulations that aim to stop internet corporations from controlling the digital market are scheduled to take effect.
The Digital Markets Act, which goes into force on Thursday, places "gatekeeper" businesses like Apple, Meta, Alphabet, the parent company of Google, and ByteDance, the parent company of TikTok, under a list of dos and don'ts with the potential for steep fines.
The provisions of the DMA are intended to stop digital firms from engaging in the kind of activity that is the focus of the Apple probe. Apple has previously disclosed how it would abide by the regulations; among other things, it will permit iPhone owners in Europe to utilize app shops other than its own and developers to provide alternate payment methods.
