Apple faces EU fine of more than $500 million in Spotify scandal

Apple faces a fine of nearly 500 million euros ($539 million, about Rs 4,475 crore) from the European Union over regulators’ accusations it suppressed music streaming rivals, including Spotify Technology SA, on its platform investigation.

According to people familiar with the matter, EU regulators found that Apple violated competition rules by blocking rival music services from informing users of cheaper alternatives outside its App Store. This penalty will be Apple’s first EU penalty. .

When contacted for comment, Apple pointed to a previous statement in which it said “the App Store has helped Spotify become Europe’s top music streaming service.” The European Commission declined to comment. The Financial Times earlier reported the fine.

EU competition chief Margrethe Vestager has made it a core strategy to try to weaken the dominance of big tech companies in the bloc through fines and regulatory action. She fined Alphabet’s Google more than 8 billion euros (about 71,577 crore rupees) and ordered Apple to repay 13 billion euros (about 1,163.25 billion rupees) for alleged unfair tax breaks in Ireland.

Apple also faces pressure from various EU member states. In 2020, the company was fined €1.1 billion (approximately Rs. 9,842 crore) in France for anti-competitive conduct, but the total fine was later reduced to €372 million (approximately Rs. 3,328 crore) after appeal.

The EU investigation into Apple’s App Store was triggered by a complaint nearly four years ago by Spotify, which claimed it was forced to raise monthly subscription prices to cover costs related to Apple’s alleged control over how the App Store was run.

At a closed-door meeting between EU officials and Apple last June, the tech company told regulators it had addressed any possible competition concerns raised by the Spotify complaint.

In a separate probe, Apple will accept a settlement offer in the European Union’s investigation into its touch payment technology, people familiar with the matter said.

The committee is ready to accept a 10-year proposal from Apple to open up the coveted near-field communications chips in iPhones to rival digital wallets, the people said, speaking on condition of anonymity. Because the matter is personal, he said.

Apple’s settlement action comes after EU regulators earlier formally raised concerns that the company had abused its market power by restricting the use of the technology.

Vestager is now preparing to implement the EU’s flagship Digital Markets Act, which will come into effect on March 7. The sweeping new rules are aimed at stopping tech companies from engaging in anti-competitive behavior.

Under the DMA, it would be illegal for the most powerful companies to prioritize their own services over those of their competitors. They will be prohibited from combining personal data across different services, banned from using data collected from third-party merchants to compete with them, and must allow users to download apps from rival platforms.