On Monday, Brussels imposed a historic fine of 1.84 billion euros ($2 billion) on Apple for impeding competition from music streaming rivals through restrictive measures on its App Store. This marked the first-ever penalty for the iPhone manufacturer’s violation of EU regulations. The European Union’s antitrust authorities took action in response to a complaint filed by Spotify, headquartered in Stockholm, alleging that Apple unfairly prioritized its own services over competitors selling subscriptions through the App Store. The EU’s Competition Commissioner, Margrethe Vestager, said Apple abused its dominant position and prevented consumers from choosing cheaper or better music services.
The commission focused on a rule forcing developers to use Apple’s in-app payment system, which charges a 30% commission on subscriptions. The rule also prevented apps from directing users to the web in their own app to sign up for music streaming services. This inflated the cost of those services for consumers and prevented them from comparing features, prices, and other details before buying subscriptions.
It was the most significant fine ever imposed by the European Union on a single company. It is a milestone for the EU’s antitrust authorities, who are starting to assert themselves against Big Tech. It is also a setback for the US firm, which has sought to frame its alleged conduct as not being about the App Store and not an attack on Spotify, which had complained publicly in 2019.
Spotify is among only a few major European consumer technology companies with global business. That makes people listen when it speaks out. So the Swedish streamer has become a reluctant figurehead for disgruntled European software developers who feel that their complaints about Big Tech are finally being heard.
That has helped the EU to slap more than 30 European tech firms, including video game maker Epic Games, with substantial fines for violating EU antitrust rules. But it has been a struggle to get the European Commission to act against Apple, with the regulators saying they had no evidence that consumers had suffered harm.
Despite that, the commissioner has kept the pressure on the tech giant and its peers to act. On Friday, 34 digital companies, including Spotify and Epic Games, wrote to the EU’s top antitrust official, calling on her to investigate Apple for allegedly blocking the spread of their services.
On Monday, the European Union’s decision was based on a basic penalty of 40 million euros, which Vestager qualified as a “parking ticket” for Apple relative to its size. It was inflated by the huge lump sum included as a deterrent – a first for the European Union’s antitrust authorities. The total of 1.84 billion euros is 0.5% of the US tech giant’s global turnover. That is nearly four times the 500 million euros sources had expected to be levied against Apple. The EU plans to review the case in 2022 and could fine the company further if necessary.