EU fines Apple $1.8 billion over music streaming competition

The European Union on Monday hit tech giant Apple with an antitrust fine worth €1.8 billion ($1.9 billion).

The statement said that the company had been unfairly favoring its own music streaming service over those of its rivals.

What was the reason for the fine?

"The Commission found that Apple applied restrictions on app developers preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the app," the European Commission said in a statement.

"This is illegal under EU antitrust rules."

Apple charges a 30% fee for sales made through apps in the iOS operating systems. It also prohibits apps within the operating system from providing links to external sign-up pages to bypass the fee.

Apple is one of six major companies that have to comply with new EU competition regulations under the Digital Markets Act (DMA) by March 6.

Besides Apple, the EU has launched several antitrust proceedings against large tech companies, including a probe into Microsoft over its packaging of the messaging app Teams.

The bloc has also handed Google fines of €8 billion in total over the past few years, including a 2022 penalty for having its Android phones favor the Google search engine.

What did the EU say?

The European Commissioner for Competition, Margrethe Vestager, said that the Commission had ordered Apple to remove anti-steering provisions and refrain from similar practices in the future.

"From now on, Apple will have to allow music streaming developers to communicate freely with their own users," she said.

Vestager said that the lump sum of €1.8 billion had been added as a deterrent since the basic amount of the fine, which she compared to a "parking ticket," would have been quite small.

The total fine of €1.84 billion amounts to 0.5% of Apple's worldwide turnover, according to Vestager.

What did Apple say about the fine?

Apple said that the biggest beneficiary of the decision is the Swedish streaming service Spotify, which sells subscriptions through its own website and not through Apple's app store.

The firm said it would appeal the decision.

"The decision... ignores the realities of a market that is thriving, competitive, and growing fast," the company said in a statement, arguing that the Commission failed "to uncover any credible evidence of consumer harm."

"Apple will appeal."

Apple said that Spotify holds a 56% share of Europe's streaming market and had met 65 times with the commissioner over eight years.

"Ironically, in the name of competition, today's decision just cements the dominant position of a successful European company that is the digital music market's runaway leader," Apple said.

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sdi/ab (AP, Reuters, AFP, dpa)