Apple Hit With Massive EU Antitrust Fine

The European Commission has hit Apple with a massive $2 billion fine for "or abusing its dominant position on the market."...
Apple Hit With Massive EU Antitrust Fine
Written by Matt Milano
  • The European Commission has hit Apple with a massive $2 billion fine for “or abusing its dominant position on the market for the distribution of music streaming apps.”

    Apple has managed to dodge antitrust fines in the EU, at least until now. The EU commission levied the fine in response to a complaint by Spotify. The investigation revolves around accusations of “anti-steering,” a term for Apple’s attempts to ban apps from steering their users to cheaper ways to subscribe to their services.

    The EU says its “investigation found that Apple bans music streaming app developers from fully informing iOS users about alternative and cheaper music subscription services available outside of the app and from providing any instructions about how to subscribe to such offers.”

    The EU Commission says that Apple’s anti-steering measures, which lasted for nearly a decade, may have caused many users to pay much more for subscriptions than they should have.

    “For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” said Margrethe Vestager, Executive Vice-President in charge of competition policy. “They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem. This is illegal under EU antitrust rules, so today we have fined Apple over €1.8 billion.”

    In addition to the fine, the EU ordered Apple to cease its anti-steering practices.

    The Commission has also ordered Apple to remove the anti-steering provisions and to refrain from repeating the infringement or from adopting practices with an equivalent object or effect in the future.

    Apple has already fired back, releasing a statement that says the EU’s investigation turned up no credible proof to support the accusations.

    Today, the European Commission announced a decision claiming the App Store has been a barrier to competition in the digital music market. The decision was reached despite the Commission’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast.

    Apple also called out Spotify, its position in the EU market and its motivations.

    The primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden. Spotify has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation.

    Today, Spotify has a 56 percent share of Europe’s music streaming market — more than double their closest competitor’s — and pays Apple nothing for the services that have helped make them one of the most recognizable brands in the world. A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world.

    Apple goes on to say that Spotify is unfairly trying to change the rules of the App Store to gain an even greater advantage.

    But free isn’t enough for Spotify. They also want to rewrite the rules of the App Store — in a way that advantages them even more.

    Like many companies, Spotify uses emails, social media, text messages, web ads, and many other ways to reach potential customers. Under the App Store’s reader rule, Spotify can also include a link in their app to a webpage where users can create or manage an account.

    We introduced the reader rule years ago in response to feedback from developers like Spotify. And a lot of reader apps use that option to link users to a webpage — from e-readers to video streaming services. Spotify could too — but they’ve chosen not to.

    Instead, Spotify wants to bend the rules in their favor by embedding subscription prices in their app without using the App Store’s In-App Purchase system. They want to use Apple’s tools and technologies, distribute on the App Store, and benefit from the trust we’ve built with users — and to pay Apple nothing for it.

    In short, Spotify wants more.

    Apple says it plans to appeal the decision.

    Get the WebProNews newsletter delivered to your inbox

    Get the free daily newsletter read by decision makers

    Advertise with Us

    Ready to get started?

    Get our media kit