LONDON (Keynote USA) — The European Union imposed its first antitrust sanction against Apple on Monday, fining the American technology giant almost $2 billion for unfairly favoring its own music streaming service by prohibiting rivals such as Spotify from telling users how they could pay cheaper subscriptions abroad. of iPhone applications.
Apple prevented streaming services from informing users about payment options available through their websites, which would avoid the 30% fee charged when people pay through apps downloaded from the iOS App Store said the European Commission, the executive arm of the 27-nation bloc and top antitrust body. executor.
“This is illegal. And it has impacted millions of European consumers who were unable to freely choose where, how, and at what price to buy streaming music subscriptions,” Margrethe Vestager, EU competition commissioner, said at a news conference in Brussels.
Apple, which is challenging the decision, behaved in this way for a decade, resulting in “millions of people paying two or three euros more per month for its streaming music service than they would have had to pay otherwise.” way,” he said.
Keynote USA correspondent Charles de Ledesma reports.
It’s the culmination of a bitter, years-long dispute between Apple and Spotify over music streaming supremacy. A complaint from the Swedish streaming service five years ago triggered the investigation that led to the 1.8 billion euro ($1.95 billion) fine.
The decision comes the same week that new rules come into force to prevent tech giants from cornering digital markets.
The EU has led global efforts to crack down on big tech companies, including three fines on Google totaling more than €8 billion, accusing Meta of distorting the online classifieds market and forcing Amazon to change their business practices.
Apple’s fine is so high because it includes an additional lump sum to deter it from committing further crimes or other tech companies from committing similar crimes, the commission said.
It’s not the only penalty the tech giant could face: Apple is still trying to resolve a separate EU antitrust investigation into its mobile payments service by promising to open its tap-and-go mobile payments system to rivals.
Apple responded to the commission and Spotify, saying it would appeal Monday’s fine.
“The decision was made despite the Commission’s failure to uncover any credible evidence of consumer harm and ignores the realities of a market that is prosperous, competitive, and rapidly growing,” the company said in a statement.
He said Spotify would benefit from the EU move, saying the Swedish streaming giant met more than 65 times with the commission during the investigation, has a 56% share of the European music streaming market, and does not pay Apple. for using your App Store.
“Ironically, in the name of competition, today’s decision only cements the dominant position of a successful European company that is the undisputed leader in the digital music market,” Apple said.
Spotify said it welcomed the EU fine, without addressing Apple’s allegations.
“This decision sends a powerful message: no company, not even a monopoly like Apple, can abusively wield the power to control how other companies interact with their customers,” Spotify said in a blog post.
The commission’s investigation initially focused on two concerns. One was the iPhone maker’s practice of forcing app developers that sell digital content to use its internal payment system, which charges a 30% commission on all subscriptions.
Those fees have become an important part of Apple’s services division, which generated $85 billion in revenue during the company’s last fiscal year that ended in September.
Several legal and regulatory developments in the US and Europe that threaten to lower Apple’s App Store fees have been weighing on the company’s shares, which have fallen 9% so far this year, while the Technology-driven Nasdaq Composite Index has gained 8%. Apple shares fell 2.5% in US trading on Monday.
But then the EU turned its attention to how Apple prevents app makers from telling their users about cheaper ways to pay for subscriptions that don’t involve going through an app.
The investigation found that Apple prohibited streaming services from telling users how much subscription offers cost outside of their apps, placing links in their apps to pay for alternative subscriptions, or even sending emails to users to tell them about different subscription options. prices.
“As a result, millions of European music streaming users were left without information about all available options,” Vestager said, adding that the commission’s investigation found that just over 20% of consumers who would have subscribed to the premium service from Spotify didn’t. do it due to restrictions.
The fine comes just before new EU rules aimed at preventing technology companies from dominating digital markets come into force.
The Digital Markets Act, which goes into effect on Thursday, imposes a series of do’s and don’ts on “gatekeeper” companies, including Apple, Meta, Google parent Alphabet, and TikTok parent ByteDance. , under threat of heavy fines.
The DMA provisions are designed to prevent tech giants from engaging in the type of behavior that is at the center of the Apple investigation. Apple has already revealed how it will comply, including allowing iPhone users in Europe to use app stores other than its own and allowing developers to offer alternative payment systems.
Vestager warned that the commission would carefully examine how Apple follows the new rules.
“Apple will have to open the doors of its ecosystem to allow users to easily find the apps they want, pay for them however they want, and use them on any device they want,” he said.
Keynote USA News
For Latest Apple News. Follow @Keynote USA News on Twitter Or Google News.
