Apple hit with €1.8Bn EU fine on Spotify’s complaint

The European Union (EU) has now levied a hefty fine of €1.8 billion (roughly $2 billion) on Apple, marking a significant moment in the ongoing fight against dominance by Big Tech companies. This financial penalty stems from an investigation into Apple’s anti-competitive practices within the music streaming market on its iOS platform.

“The European Commission has fined Apple over €1.8 billion for abusing its dominant position on the market for the distribution of music streaming apps to iPhone and iPad users (‘iOS users’) through its App Store. In particular, the Commission 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 (‘anti-steering provisions’). This is illegal under EU antitrust rules,” the EU noted in an official release.

The EU’s investigation into Apple’s App Store practices stemmed from complaints lodged by Spotify Technology SA and other music-streaming rivals. The core of the issue lies in Apple’s implementation of “anti-steering” provisions and accusations that Apple had abused its dominant position by imposing unfair restrictions on app developers, particularly those offering competing music-streaming services. These provisions effectively restrict music streaming app developers from informing users about alternative, potentially cheaper, subscription options outside of Apple’s App Store, and the price differences between the two. They are also forbidden from including links in their apps that lead iOS users to the websites of the app developers. This creates a crucial disadvantage for competing services like Spotify, limiting their ability to effectively communicate with users and potentially leading to higher subscription prices for consumers.

“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” EU antitrust chief Margrethe Vestager commented on the matter. “They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem. Apple’s rules ended up harming consumers,” she stated. “Critical information was withheld so that consumers could not effectively use or make informed choices. Some consumers may have paid more because they weren’t aware that they could pay less if they subscribed outside of the app.”

For its part, the Cupertino-headquartered tech titan contested the EU’s decision, claiming it lacked “credible evidence of consumer harm” and disregarded the reality of a vibrant and competitive music streaming market. “What’s clear is that this decision is not grounded in existing competition law,” Apple writes. “It’s an effort by the Commission to enforce the DMA [Digital Markets Act] before the DMA becomes law. The reality is that European consumers have more choices than ever. Ironically, in the name of competition, today’s decision just cements the dominant position of a successful European company that is the digital music market’s runaway leader.”

Apple went on to claim that the primary beneficiary of this decision was Spotify, its leading competitor, which it accused of misusing the investigation process. In a statement, Apple claimed that Spotify had “spent the best part of a decade attempting to fashion competition complaints with little grounding in reality.”