Apple Inc. has received a fine of 1.8 billion euros from the European Union after being investigated for allegations of silencing music streaming competitors such as Spotify Technology SA. The European Commission has also ordered the company from Cupertino, California, to stop preventing music streaming apps from offering users more affordable alternatives outside of Apple's App Store.
"Apple has exploited its dominant position in the market for the distribution of music streaming apps in the App Store for a decade," said EU Competition Commissioner Margrethe Vestager. "They did this by preventing developers from informing consumers about cheaper music services outside of the Apple ecosystem." Apple rejected the EU's penalty and stated that the regulators "have not found credible evidence of consumer harm and are ignoring the realities of a flourishing, competitive, and rapidly growing market."
In the first quarter, Apple recorded revenues of 119.6 billion US dollars, of which 69.7 billion US dollars came from the iPhone alone. The device's revenue increased by 6% compared to the previous year. It is a core strategy of Vestager to undermine the dominance of Big Tech in the bloc through fines and regulatory measures. She has already imposed fines of over 8 billion euros on Alphabet Inc.'s Google and also ordered Apple to repay 13 billion euros in allegedly illicit tax advantages from Ireland. The EU's breakup of Apple's App Store coincides with comprehensive new rules aimed at preventing market abuse before it takes root.
As part of the Digital Markets Act, Which Fully Comes into Force This Week, It Will Be Illegal for the Most Powerful Tech Companies to Favor Their Own Services Over Competitors. Companies Will Be Prevented From Combining Personal Data Across Their Various Services and Using Data Collected from Third Parties to Compete Against Them. They Must Also Allow Users to Download Apps From Competing Platforms. The Rules Will Be Fully Effective on March 7, and Apple Has Also Challenged Its Classification Under the New Regime.
The EU investigations were triggered by a complaint from Spotify, which was filed almost five years ago. The company claimed that it was forced to raise prices for its monthly subscriptions to cover costs associated with Apple's alleged control over the App Store. The European Commission has focused on Apple's so-called anti-steering rules and published a formal Statement of Objections in February, claiming that the terms were unnecessary and led to consumers paying higher prices.
