Rayan Antony
The penalty was imposed by the European Union on March 4, 2024, for breaching the law that Apple had restricted music streaming services from informing users of cheaper payment options outside of its App Store, giving an unfair advantage of its services.
The European Commission began investigating the issue in 2019 after Spotify, the largest music streaming app in the world, filed a complaint against Apple, alleging anti-competitive behaviour and a dominant position in the market for the distribution of music streaming apps. During this probe, Spotify, the company based in Stockholm, Sweden, has met with the European Commission over 65 times.
Spotify asserted that by imposing a 30% tax on all sales and blocking other companies from notifying users that the customers might avoid the additional costs by signing up on Spotify’s website, Apple had restricted choice and competition in its app store. But Apple Music is not subject to the same additional fees. As per the EC’s rule, communicating this information through the Apple app or contacting the customers directly is prohibited.
The European Union’s Digital Market Act aims to foster competition and reduce the market dominance of major tech companies like Apple and Google. The tech companies were given six months from August last year to comply with the new legislation. If they fail to do that, the DMA has decided to implement an additional fine of up to 10% of their annual turnover. The European Commission stresses Apple’s need to remove restrictions that prevent users from knowing about cheaper payment options outside the App Store.
“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” said Margrethe Vestager, the EU vice-president with oversight of competition issues. “Apple’s conduct, which lasted for almost 10 years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions,” the European Commission said in a statement.
The charge of €1.8 billion was the third biggest antitrust fine the European Commission has imposed. The EC also penalized Google with a $4.34 billion fine in 2018 and Amazon with a $2.42 billion fine in 2017. The fine creates a significant challenge to Apple’s operational guidelines and might have wider effects on the digital industry. Financial Times highlights the significance of this penalty as Apple’s first from Brussels, marking an escalation in the security of Big Tech by competition watchdogs.
As Apple did not fully inform their device users of alternative and cheaper subscription services for more than a decade, as highlighted in Sky News, with this ruling, the European Union’s DMA has demonstrated its determination to protect consumers’ rights to choose and fair competition in the digital marketplace. At the same time, BBC News reports that Apple plans to appeal, denying any consumer harm and criticizing the Commission’s decision as lacking evidence.
Photo: https://scx1.b-cdn.net/csz/news/800a/2024/spotify-has-been-one-o.jpg
Acta Diurna 
