European Commission Fines Apple Over Music-Streaming Restrictions

The European Commission has imposed a fine of 1.8 billion euros, equivalent to about $1.95 billion, on Apple, as part of its ongoing regulatory scrutiny within the European Union. In a press release issued on Monday, the Commission stated that Apple had been penalized for “abusing its dominant position on the market” concerning the distribution of music-streaming platforms through its App Store.

Antitrust Violations

The regulatory body found that Apple had imposed restrictions on app developers, preventing them from informing iOS users about alternative and potentially cheaper music subscription services available outside of the App Store ecosystem. This practice, deemed anti-competitive by the Commission, led to higher prices for music streaming subscriptions for iOS users over nearly a decade.

Impact on Consumers

As a result of Apple’s restrictions, users faced limited options, either having to seek out cheaper subscription offers externally or forgoing subscription services altogether due to the lack of alternatives within the app. The Commission emphasized that such restrictions created unfair trading conditions and violated EU antitrust regulations.

Apple’s Response and Legal Action

In response to the fine, Apple announced its intention to appeal the decision, contesting the Commission’s findings. The tech giant criticized Spotify, labeling it as the “biggest beneficiary” of the ruling. Apple accused Spotify of attempting to circumvent App Store rules by embedding subscription prices within its app without utilizing the In-App Purchase system.

Spotify’s Reaction

Conversely, Spotify welcomed the Commission’s decision and the imposed fine, stating that it sends a “powerful message” against abusive market practices. The streaming platform hailed the ruling as a win for consumers, emphasizing the importance of regulatory measures to curb monopolistic behavior in the digital marketplace.

Investigation Background

The Commission initiated its investigation into Apple following a complaint lodged by Spotify in 2019. Spotify alleged that Apple’s App Store policies unfairly restricted choice and innovation by imposing a 30% commission on app developers. Apple has since announced changes in the EU to align with the Digital Markets Act, aimed at promoting competition and curbing the dominance of tech giants.

Market Response and Conclusion

Following the announcement of the fine, shares of Spotify experienced a nearly 1.9% increase in Paris trading. Both Spotify and Apple have yet to respond to requests for comment regarding the Commission’s decision. As the legal battle unfolds, the case underscores the ongoing regulatory scrutiny faced by major tech companies operating within the European Union’s jurisdiction.