EU fines Apple €1.8 billion over App Store rules
By Oluwaseyi Lawal
The European Union recently imposed a €1.8 billion fine on Apple Inc. following an inquiry into accusations that it stifled competition from music-streaming competitors like Spotify Technology SA on its platforms.
Additionally, the European Commission instructed the Cupertino-headquartered company to cease blocking music-streaming applications from alerting users about more cost-effective options outside of Apple’s App Store.
Apple has, however, rejected the EU’s fine, saying in a statement that regulators failed to “uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast.”
Commenting on the decision of the EU after the investigation, EU antitrust chief, Margrethe Vestager said: “For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store.
“They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem.”
The European Union’s action against Apple’s App Store coincides with extensive new regulations designed to prevent market abuses before they become entrenched. With the Digital Markets Act coming into full force this week, the most dominant tech companies will be prohibited from prioritizing their own services over those of their competitors.
These regulations will prevent companies from merging personal data from various services and from leveraging data obtained from third-party sellers to gain a competitive edge against them. Additionally, they will be required to enable users to download apps from competing platforms. Set to be fully implemented on March 7, these rules have prompted Apple to challenge its classification under the new regulatory framework.
In response to the fine, Apple stated on Monday that Spotify, the primary beneficiary of the EU’s ruling, has been profiting from the App Store without compensating for the services it receives.
“Today, the European Commission announced a decision claiming the App Store has been a barrier to competition in the digital music market. 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 primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden. Spotify has the largest music streaming app in the world and has met with the European Commission more than 65 times during this investigation.
“Today, Spotify has a 56 percent share of Europe’s music streaming market — more than double their closest competitor’s — and pays Apple nothing for the services that have helped make them one of the most recognizable brands in the world.
“A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world,” Apple stated.
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