The European Union on Monday issued its first antitrust penalty against Apple, fining the U.S. tech giant nearly $2 billion for violating EU rules by unfairly favoring its own music streaming service over rivals. competition law.
The European Commission, the 27-nation bloc’s executive arm and top antitrust enforcer, said Apple prohibits app developers from “fully informing iOS users of alternative and cheaper music subscription services outside of apps.”
“This is illegal and it affects millions of European consumers,” EU Competition Commissioner Margrethe Vestager told a news conference.
The commission said Apple’s behavior, which has continued for nearly a decade, means many users “pay significantly higher prices for music streaming subscriptions.”
Complaints against Swedish streaming service Spotify five years ago triggered a long-running investigation and subsequent €1.8 billion fine.
The European Union has led a global crackdown on big tech companies, including a series of multi-billion dollar fines against Google and accusations that Meta distorted the online classified advertising market. The committee also launched a separate antitrust investigation into Apple’s mobile payment services.
Apple hit back at the commission and Spotify, saying it would appeal the penalty.
“This decision was made despite the Commission’s failure to find any credible evidence of consumer harm and ignoring the reality of a booming, competitive and rapidly growing market,” the company said in a statement.
The company said Spotify would benefit from the decision, claiming that the Swedish streaming service, which holds 56% of the European music streaming market and does not pay Apple for use of its App Store, has been with the company for eight years. The committee met 65 times.
“Ironically, in the name of competition, today’s decision only solidifies the dominance of a successful European company that is the runaway leader in the digital music market,” Apple said.
The commission’s investigation initially focused on two issues. One is the iPhone maker’s practice of forcing app developers that sell digital content to use its internal payment system, which charges a 30% commission on all subscriptions.
But the EU later abandoned that, focusing instead on how Apple could prevent app makers from telling users about cheaper subscription payment methods that didn’t involve apps.
The investigation found that Apple prohibited streaming services from telling users about subscription costs outside of its apps, including links within apps to pay for alternative subscriptions, and even from sending emails to users telling them about different pricing options.
The fine comes in the same week as new EU rules come into effect aimed at stopping tech companies from dominating digital markets.
The Digital Markets Act, which takes effect on Thursday, imposes a raft of regulations on gatekeeper companies such as Apple, Meta, Google parent Alphabet and TikTok parent ByteDance, and threatens huge fines.
The DMA’s rules are designed to prevent tech giants from engaging in conduct at the heart of Apple’s investigation. Apple has revealed how it will comply, including allowing iPhone users in Europe to use App Stores other than Apple’s own and allowing developers to offer alternative payment systems.
The committee has also launched a separate antitrust investigation into Apple’s mobile payment services, and the company has pledged to open its tap-and-go mobile payment system to competitors to address the issue.
Follow us on Google news ,Twitter , and Join Whatsapp Group of thelocalreport.in
