The tech giant’s app store regulations had an adverse effect on the music streaming business, leading the European agency to pay Apple roughly $2 billion in antitrust penalties. The agency made this announcement on Monday.
The European Union has fined the American tech giant for antitrust infringement for the first time, with a fine of 1.8 billion euros. The punishment is the result of an extensive inquiry that was sparked by a Spotify complaint.
The verdict focuses on Apple’s so-called anti-steering provisions, which are regulations the company put in place to prohibit makers of music streaming applications from fully disclosing to users of its iOS operating system about alternative, less expensive subscription services that are accessible outside of their apps. Apple Music, the company’s own music streaming service, is a rival to Spotify.
In order to safeguard Apple’s business interests, the EU determined that Apple’s anti-steering provision amounted to “unfair trading conditions” and was “neither necessary nor appropriate.” Rather, the commission claimed that the restrictions “negatively affect the interests of iOS users.”
“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store. They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem,” European Commission executive vice president Margrethe Vestager said in a statement.
In a blog post, Apple vehemently denied the accusations of anti-competitive behaviour and said that it will appeal the ruling.
Apple’s statement refutes the accusations by highlighting Spotify’s widespread use as a streaming service. According to the tech behemoth, Spotify, located in Sweden, holds a 56% market share in Europe for music streaming.
As a “important moment in the fight for a more open internet for consumers,” Spotify praised the judgement in a statement and said, “We’re looking forward to the next steps that will hopefully clearly and conclusively address Apple’s long-standing unfair practices.”
The EU’s historic fine against Apple was announced the same week that the Digital Markets Act, Europe’s new antitrust laws, went into force. Five companies that are considered gatekeepers under the guidelines will be forced, including Apple, to modify their policies in order to comply with the new competition standards.
Apple has released new guidelines for the app store as part of that regulation, including allowing third-party software shops to access the iPhone. Businesses that violate the new regulations risk paying steep fines.
The U.S. corporations Microsoft, Amazon, Alphabet, the owner of Facebook, Google, and ByteDance, the owner of TikTok, are among the gatekeepers along with Apple.
