EU Fines Apple 1.8bn Euros Over Music Streaming Restrictions

The European Commission has fined Apple more than 1.8 billion euros (£1.6bn) over the company’s restrictions on competition in music streaming.

The fine is the company’s first financial penalty under EU law, although it was hit by a 1.1bn euro penalty in France in 2020 for allegedly restricting competition, later reduced to 372m euros on appeal.

The firm said the EU had not found any consumer harm.

EU competition chief Margrethe Vestager said Apple had broken EU law for a decade by “restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem”.

EU competition chief Margrethe Vestager.  Image credit: European Commission

Deterrent

This was an abuse of Apple’s dominant position for music streaming with its App Store, she said. The company was ordered to remove all restrictions.

Apple said it would appeal.

The Commission’s investigation began in 2019 following a complaint from Swedish streaming service Spotify, which sells subscriptions via the web only in order to avoid Apple’s commissions of typically 30 percent.

Vestager said the “traditional part of the fine” was only about 40m euros, which she said amounted to “not even a speeding ticket” for a company with Apple’s size.

As a result the fine was increased to 1.84bn euros, which the Commission said was 0.5 percent of Apple’s global turnover, in order to act as a deterrent for Apple and other companies with similar resources.

Spotify chief executive Daniel Ek. Image credit: Spotify

‘No evidence of consumer harm’

It said it took into account that Apple submitted incorrect information during the investigation.

Apple said the Commission had failed to “uncover any credible evidence of consumer harm” and that the decision “ignores the realities of a market that is thriving, competitive, and growing fast”.

“The primary advocate for this decision, and the biggest beneficiary, is Spotify,” Apple said.

Spotify said the decision showed that “no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers”.

Digital Markets Act

Apple and other large tech companies have been announcing upcoming changes ahead of a 6 March deadline for compliance with new Big Tech rules under the Digital Markets Act (DMA).

But last week Spotify and 33 other companies in a range of digital sectors wrote to the European Commission that the new terms suggested by Apple “make a mockery of the DMA“.

In January Spotify said new developer fees announced by Apple as part of the compliance efforts were “outrageous”.

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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