The European Commission, the main sector regulator of the European Union (EU), has imposed a hefty fine of €1.84 billion on American tech giant, Apple, for its abusive dominant position in the iOS music streaming market. As part of the ruling, the EU body proclaimed that Apple can’t prohibit competitors from advertising their more affordable services.
The Commission in its press release revealed that the investigative process brought to light Apple’s prohibitions on application developers from adequately informing iOS users about alternatives and more cost-effective music services. The tech company also prevents developers from notifying users about how to start interacting with alternative music services. The commission determined the fine considering the ‘length and severity of the violation’, Apple’s turnover and its market capitalization, and the company providing ‘unreliable information’ during the inquiry.
“Over the last decade, Apple has been exploiting its dominant position in the music streaming application distribution market via the App Store. They have restricted developers from informing consumers about alternatives, cheaper music services available outside Apple’s ecosystem. This violation of EU antitrust rules prompted us to impose a fine of over €1.8 billion today,” stated Margrethe Vestager, the Vice President of the European Commission.
“This decision sends a potent signal: no company, not even a monopoly like Apple, can misuse their authority to control how other companies interact with their customers. Apple’s rules hindered Spotify and other music streaming services from sharing various advantages directly within their app to our users, depriving us of the opportunity to inform them about subscription upgrade methods, cost, promotional activities, discounts, and other benefits. Of course, Apple Music, a competitor of our application, did not have such inhibitions,” Spotify lauded the Commission’s ruling in a statement.
Apple responded to the European Commission’s decision, asserting that the regulator failed to discover any valid evidence of harm to consumers or anti-competitive behavior. The company underscored that Spotify wants to ‘rewrite the App Store rules’ to gain competitive advantages, without making any payments to Apple, despite the App Store being pivotal for Spotify’s current dominance in the music streaming market.
It’s noteworthy that the Commission’s investigation began in 2020 following a complaint from Spotify, which accused Apple of illegal collection of 30% commission for payments conducted within iOS applications. Spotify also expressed disagreement with App Store rules that allegedly restricted the platform from interacting with its customers and conveying information, including marketing-related data.
