On Monday, the European Union imposed its first antitrust fine of almost $2 billion on the American tech giant for violating the bloc’s competition regulations by unjustly giving preference to its own music streaming service over competitors.
The European Commission, the executive body of the 27-nation union and chief antitrust regulator, alleged that Apple prevented app developers from “fully informing iOS users about alternative and cheaper music subscription services outside of the app.”
“This is unlawful, and it has affected millions of consumers throughout Europe,” stated EU Competition Commissioner Margrethe Vestager during a press conference.
Laptops 1000The commission claimed that because Apple acted in this manner for nearly ten years, many customers had to pay “significantly higher prices for music streaming subscriptions.”
The lengthy inquiry that was started five years ago by a complaint from the Swedish streaming service Spotify resulted in the 1.8 billion euro fine.
Global efforts to clamp down on Big Tech corporations have been spearheaded by the EU, which has fined Google several billions of dollars and accused Meta of manipulating the online classified ad market.
Additionally, a separate antitrust inquiry into Apple’s mobile payments business has been launched by the commission.
Apple retaliated, threatening to appeal the fine, against Spotify as well as the commission.
As to the company’s statement, “The decision was made despite the Commission’s inability to find any reliable proof of harm to consumers, and it disregards the facts of a market that is booming, competitive, and expanding quickly.”
Asserting that Spotify, a Swedish streaming service with a 56% market share in Europe for music streaming and no payment to Apple for utilizing its App Store, had met with the commission 65 times in eight years, it said Spotify stood to gain from the ruling.
Apple stated, “Ironically, in the name of competition, today’s decision just cements the dominant position of a successful European company that is the runaway leader in the digital music market.”
Laptops 1000Initially, the commission’s examination was focused on two issues. One was the iPhone maker’s policy of making an in-house payment processor, which levies a thirty percent commission on all subscriptions, mandatory for app developers selling digital content.
However, the EU later abandoned that in favor of concentrating on Apple’s prohibition against app developers informing their users of less expensive alternatives to paying for subscriptions that don’t go through an app.
According to the inquiry, Apple has prohibited streaming services from informing users about the costs of subscription packages that aren’t within their applications, including buttons within the apps that allow users to pay for other subscriptions or even sending customers emails with information about various pricing alternatives.
The sanction is imposed in the same week as new EU regulations that aim to keep tech corporations from controlling the digital market are scheduled to take effect.
Under fear of steep fines, “gatekeeper” corporations like Apple, Meta, Alphabet, the parent company of Google, and ByteDance, the parent company of TikTok, are subject to a set of dos and don’ts under the Digital Markets Act, which is poised to go into force on Thursday.
The DMA’s regulations are intended to stop tech behemoths from engaging in the kind of conduct that is at the core of Apple’s inquiry.
Apple has previously disclosed how it will abide by the regulations; among other things, it will permit iPhone owners in Europe to utilize app shops other than its own and developers to provide alternate payment methods.
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