The European Union made its first antitrust penalty against tech giant Apple, levying a hefty €1.8 billion fine for violating the EU’s competition laws.
The ruling accused Apple of showing bias towards its music streaming service at the expense of competitors, thereby breaching fair competition regulations within the bloc.
According to the European Commission, Apple restricted app developers from fully informing iOS users about alternative and more cost-effective music subscription services outside of the official App Store platform.
“This is illegal, and it has impacted millions of European consumers,” Margrethe Vestager, the EU’s competition commissioner, said at a news conference.
The Commission’s investigation revealed that Apple had engaged in these anticompetitive behaviors for nearly a decade, resulting in European users paying significantly higher prices for music streaming subscriptions.
The fine stemmed from a petition by Spotify five years ago, even as EU reigns in on big tech companies in a proactive stance against violating competition laws.
The EU has been actively pursuing antitrust actions against major tech players, including imposing multibillion-dollar fines on Google and scrutinizing Meta for distorting the online classified ad market.
Additionally, the European Commission has initiated a separate antitrust probe into Apple’s mobile payments service.
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In response to the penalty, Apple expressed its intent to appeal the decision, criticizing the Commission’s lack of evidence of consumer harm and asserting that the market is competitive and flourishing.
“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,” the company said in a statement.
Apple also pointed out Spotify’s dominant position in the European music streaming market, saying it receives benefits it receives from the App Store without direct payments.
The investigation initially focused on Apple’s mandatory use of its payment system for in-app purchases, which charged a 30 percent commission on all subscriptions.
However, the EU shifted its attention to how Apple restricts app developers from informing users about alternative subscription payment methods outside the app environment.
The investigation uncovered Apple’s prohibition on streaming services from disclosing pricing information for subscriptions outside their apps, hindering fair competition and consumer choice.
This antitrust ruling coincides with the already-enforced Digital Markets Act (DMA), which prevents tech companies from monopolizing digital markets.
The DMA introduced regulations for “gatekeeper” companies like Apple, Meta, Google, and ByteDance, imposing fines for non-compliance.
Apple has outlined its compliance strategy, including allowing European iPhone users to access alternative app stores and enabling developers to offer alternative payment systems.
