by LONDON (AP) — The European Union levied its first antitrust penalty against Apple on Monday, fining the U.S. tech giant nearly $2 billion for breaking the bloc’s competition laws by unfairly favoring its music streaming service. itself over competitors.
Apple forced app developers to tell users where they could go to pay for cheaper music subscriptions instead of paying through iOS apps, the European Commission, the 27-nation bloc’s executive arm and top antitrust enforcer, said.
“This is illegal. And it affects millions of European consumers who could not make a free choice about where, how and at what price to buy music streaming subscriptions,” said Margrethe Vestager, the EU’s competition commissioner, at a news conference in Brussels.
Apple – which said it opposes the decision – has behaved in this way for ten years, which has resulted in “millions of people who have paid two, three euros more per month for their music streaming service than they would otherwise have to pay,” she said.
The 1.8 billion euro fine follows an investigation sparked by a complaint from Swedish streaming service Spotify five years ago. Since then, the EU has drawn up new regulations that will come into effect this week to prevent tech giants from cornering digital markets.
The EU is leading global efforts to crack down on Big Tech companies, including by fining Google worth more than 8 billion euros and punishing Meta for distorting the online classifieds market.
Meanwhile, Apple is trying to resolve a separate EU antitrust investigation into its mobile payments service by promising to open up its tap-and-go mobile payment system to competitors.
The fine for the music streaming investigation is so high because it includes a large additional lump sum to deter Apple from re-offending and to act as a deterrent to other technology companies from committing similar offences, the commission said.
Apple hit back at both the Commission and Spotify, saying it would appeal the penalty.
“The decision was reached despite the Commission’s failure to uncover any credible evidence of harm to consumers, and ignores the realities of a thriving, competitive and fast-growing market,” the company said in a statement.
He said Spotify stood to benefit from the EU’s move, asserting that the Swedish streaming giant, which has a 56% share of the European music streaming market, was beaten by Apple and that Apple does not pay for using its App Store more than 65 times. with the Commission during the investigation. .
“Ironically, in the name of competition, today’s decision cements the dominant position of a successful European company that is the leader of the digital music market,” Apple said.
Spotify said it welcomed the EU fine, without contesting Apple’s allegations.
“This decision sends a powerful message – no company, even a monopoly like Apple, can abuse the power to control how other companies interact with their customers,” Spotify said in a blog post.
The commission’s investigation initially focused on two concerns. One was the iPhone maker’s practice of forcing app developers selling digital content to use their in-house payment system, which charges a 30% commission on each subscription.
But the EU later dropped that to focus on how Apple prevents app makers from telling their users about cheaper ways to pay for subscriptions that don’t involve going through an app.
The investigation found that Apple has banned streaming services from telling users how much subscription offers cost outside of their apps, including links in their apps to pay for other subscriptions or even sending an email to users to tell them about different pricing options.
“As a result, millions of European music streaming users were left in the dark about all the options available,” Vestager said, adding that the commission’s investigation found that just over 20% of consumers sign up to Spotify’s premium service. do so because of the constraints.
The fine comes just before the start of new EU rules aimed at preventing tech companies from dominating digital markets.
The Digital Markets Act, which is due to come into force on Thursday, imposes a series of dos and don’ts on “cheat” companies including Apple, Meta, Google parent Alphabet, and TikTok parent ByteDance – under the threat of hefty fines.
The provisions of the DMA are designed to prevent tech giants from the kind of behavior at the heart of the Apple investigation. Apple has already revealed how it will comply, including allowing iPhone users in Europe to use app stores other than its own and enabling developers to offer other payment systems.
Vestager warned that the Commission would be scrutinizing Apple’s compliance with the new rules.
“Apple will need to open the gates to its ecosystem to allow users to easily find the apps they want, pay for them any way they want and use them on any device they want,” she said.
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This story has been corrected to show that the fine was issued on Monday, not Tuesday.
