EU slaps Apple with €1.8 billion positive for music streaming restrictions | EUROtoday

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The EU on Monday hit Apple with a 1.8 billion-euro-fine ($1.9 billion) for violating the bloc’s legal guidelines by stopping music streaming companies from informing customers about subscription choices outdoors of its App Store.

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The iPhone maker instantly vowed to attraction the primary ever antitrust positive slapped on Apple by Brussels, the end result of a case triggered by a criticism by Swedish music streaming big Spotify.

The European Commission mentioned it “found that Apple applied restrictions on app developers preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the app”.

“This is illegal under EU antitrust rules,” the EU’s highly effective antitrust regulator mentioned.

“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,” it added.

Spotify’s criticism in 2019 triggered a broad fee investigation into the iPhone maker in 2021, however Brussels narrowed its probe final yr to deal with Apple’s actions to forestall apps from giving customers details about rival music subscription choices.

“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” fee vice chairman Margrethe Vestager mentioned in an announcement.

“We have ordered Apple to remove the necessary provisions and to refrain from similar practices in the future,” Vestager advised reporters.

Apple slammed the fee’s resolution and mentioned it will attraction.

“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 mentioned in an announcement.

“While we respect the European Commission, the facts simply don’t support this decision. And as a result, Apple will appeal,” the corporate added.

Sour Apple

Despite the dimensions of the penalty, critics level out that even fines above a whole bunch of tens of millions of euros pale compared to how a lot Apple makes. In the final three months of 2023, Apple reported $33.92 billion in income.

Brussels has already hit Google with penalties of round eight billion euros previously few years, though the US-based agency is difficult the fines in EU courts.

But the EU expects the positive will lead Apple to cease limiting entry to rival streaming companies — all of the extra since it’ll even be obliged to take action below a brand new regulation referred to as the Digital Markets Act that it should adhere to by March 7.

Google proprietor Alphabet, Amazon, TikTok’s dad or mum firm ByteDance, Meta and Microsoft should additionally comply.

The DMA offers the fee the ability to positive corporations as much as 10 p.c of worldwide income for any violations or 20 p.c for repeat offenders.

Apple rejects Spotify’s claims and factors to the streaming big’s market dominance within the on-line music subject.

Spotify has greater than 600 million month-to-month customers, a 3rd of them are paying subscribers, in keeping with the corporate’s newest figures revealed final month.

Apple Music, a music streaming service, represents eight p.c of the European market, the corporate says, in contrast with Spotify’s greater than 50 p.c share.

Apple additionally says Spotify has paid them nothing — besides a $99 developer programme charge — though the iPhone maker claims to have performed a major half within the agency’s success.

Bitter battles

It shouldn’t be the primary time Apple and Spotify have knocked heads.

Spotify has been one of the crucial vocal critics of Apple’s adjustments to its App Store as a part of compliance with the EU’s DMA regulation.

As a part of the adjustments, the corporate will let rivals construct app shops for iPhones and permit cost companies past Apple Pay on the gadgets.

Spotify CEO Daniel Ek prices that the iPhone maker’s angle “mocks the spirit of the law”.

On Friday, 34 digital organisations together with video video games maker Epic Games and Spotify wrote to the fee to specific concern about Apple’s plans.

They mentioned Apple’s new phrases, “if left unchanged, make a mockery of the DMA and the considerable efforts by the European Commission and EU institutions to make digital markets competitive.”