The EU fined Apple €1.8 billion for unfair competition in the online music market.
The European Commission fined Apple €1.8 billion for abusing its dominant position in the music market in streaming. Brussels is punishing the company for restricting developers from reporting cheaper alternatives for purchasing “music outside the Apple ecosystem.” “This is illegal,” Competition Commissioner Margrethe Vestager said at a press conference, where she said the policy had a negative impact on millions of consumers of online music via devices such as the iPhone or iPad.
“Apple’s behavior, spanning nearly a decade, may have resulted in many iOS users paying much higher prices for streaming music subscriptions due to the fees Apple imposed on developers and passed on to consumers” in the form of higher prices for subscription to the same service,” the European Commission said in a statement.
Vestager explained that Apple penalizes providers of these services at rates of up to 30% for their use in apps (causing prices to rise relative to Apple Music) and prevents them from informing users of more low-cost subscription formulas outside of the App Store. From now on, Apple must allow providers to “freely communicate” with users within apps or via email, Vestager explained, noting that this commitment will apply not just to the online music market, but to all apps.
The Commissioner estimated the fine at 0.5% of the company’s global turnover. However, the penalty is much lower than what could be provided for under unfair competition legislation, which allows fines of up to 10% of turnover.
“The Commission concluded that the total fine of more than 1.8 billion euros is proportionate to Apple’s global revenue and is necessary to achieve a deterrent effect,” the community government said in a statement.
The fine announced this Monday stems from a complaint against Spotify filed four years ago that led to an antitrust investigation by the EU. Last year, the European Commission focused its anti-competition analysis on the restrictions it places on music apps when it comes to informing iPhone or iPad users about alternative services where they can enjoy lower prices outside the Apple Store. However, the company dropped accusations of imposing its payment technology on these applications.
Vestager’s appearance was also accompanied by warnings from Apple and other representatives of Big Tech to comply with the rules governing digital markets that have come into force. Regarding the changes proposed by Apple, which will come into force on March 7, he said that the European Commission will analyze them “in detail” and that they will take into account “Feedback From the market.”