Brussels fines Apple 1.840 million for limiting competition from platforms like Spotify

Apple faces a million-dollar fine for obstructing competition. The European Commission (EC) announced this Monday a fine of 1.840 million euros technology giant Apple for imposing from the App Store restrictions for competitors of their music streaming service like Spotify, which effectively prevented them from informing iPhone and iPad users about cheaper music subscription options outside of the app.

Abuse of dominant position

“For ten years Apple abused his dominant position in the market for distributing music streaming services through the App Store. This is illegal and affected millions of European consumers who did not have the opportunity to freely choose,” explained Margrethe Vestager, Executive Vice-President of the European Commission responsible for competition.

Brussels, which considers the fine “proportional to Apple’s global revenue” (it amounts to 0.5% of its annual turnover) and “it needs to be ensured that it is contained”ordered the Tim Cook-led company to lift restrictions on its competitors and refrain from engaging in similar practices in the future.

The fine of 1.840 million euros consists of the base is calculated according to European rules competition and an additional amount to “compensate for non-economic harm caused to consumers and achieve deterrence.”

“He must be held accountable for violating European law.”

“It’s critical that we make Apple bear responsibility for violating European legislation. If Apple abuses its dominant position, we will detect such illegal behavior, stop it and punish Apple for it,” Vestager warned at a press conference.

Brussels believes Apple has a dominant market position because it is the only way for iPhone or iPad users download online music apps like Spotify — which filed the complaint in 2019 — through its own App Store.

Apple charges competitors 30% commission on subscription plans that they offer to users they could only reach through the App Store, while these competitors pass on a price premium to users and make alternatives more expensive than Apple Music, the app itself that comes installed by default on iPhones and iPads.

Brussels found that App Store rules prevent rival Apple Music from informing iOS users about subscription prices outside the App Store itself or about price differences, including links to an alternative service’s website, or from contacting recent users to inform them about alternatives .

These bans are “neither necessary nor proportionate to the protection of Apple’s commercial interests,” according to Brussels, which also determined that “affects the interests of iOS users” preventing them from making informed decisions about where and how to purchase streaming music subscriptions.

“Apple’s behavior, going on for almost a decade, may have led many iOS users to pay a much higher price for a streaming music subscription due to fees imposed by Apple on developers and passed on to consumers in the form of higher subscription prices for the same service,” the European Commission explained in a statement.

The Association of European Consumers (BEUC) welcomed Brussels’ decision as a “strong signal in favor of customers” and stressed that this is a case where “a dominant company abuses its power in the market to impose unfair conditions on others (competitors).” to the detriment of consumers.”