Apple was, until yesterday, the only one of the American internet giants that had escaped fines for violating the competition rules of the European Union, an honor shattered with the announcement of a penalty of 1,840 million euros for abusing its dominant position in streaming music distribution.
For a decade, “Apple applied restrictions on app developers that prevented them from informing users of its iOS operating system of the existence of music subscription services existing outside the app,” thus favoring its own services, Apple Music, The vice president of the Community Executive and head of Competition, Margrethe Vestager, denounced at a press conference. Specifically, the Californian company prevents third-party companies from informing their users about subscription options outside of the iPhone or iPad apps. “This is illegal under European antitrust laws” and has prevented “millions of European consumers” from making informed decisions, in addition to forcing them to pay higher prices, Vestager added.
Brussels has ordered Apple to stop these practices completely, not only in the streaming music sector. The investigation began following a complaint from the Swedish company Spotify, the main online music platform in Europe. After six years of investigations, the Commission has concluded that Apple has engaged in “unfair commercial practices” against its rivals to favor its own app, Apple Music, a relatively new argument within European competition law. .
The Cupertino company imposes “non-negotiable” conditions on app developers, such as the prohibition of informing its users about the different subscription options inside or outside their own apps, including links to these services or contacting them directly, for example by e-mail. -mail, over other cheaper alternative subscription methods, since they do not have to pay a commission to the iPhone manufacturer, says the Commission. Brussels does not question the percentage that Apple charges app developers in its App Store (30%) but the restrictions themselves.
This extra cost makes the products severely more expensive, which is why Spotify, Netflix and other companies have given up attracting subscribers in this way and it is only possible to contract their services online. Brussels maintains that these provisions have especially harmed smaller operators, such as Deezer or SoundCloud. “Now they will be able to compete in terms of price,” Vestager said.
In light of some leaks, it was expected that Brussels’ fine would be around €500 million, hence the surprise caused by Vestager’s announcement, which explained that the figure resulting from the mere application of the sanctions guidelines would have resulted in a negligible amount, 40 million (the equivalent for Apple of “a parking fine,” he said), hence the decision to apply the provisions that allow an additional amount to be added so that it becomes a deterrent. The tip applied to the base penalty, 1.8 billion, represents 0.5% of the company’s global turnover.
Apple immediately announced its intention to appeal the fine. “The decision has been made despite the Commission’s inability to discover any credible evidence of harm to consumers and ignores the realities of a booming, competitive and growing market,” he criticized in a harsh statement in which he highlights that the main beneficiary will be the leading company in the streaming music sector in the EU, Spotify, whose managers have met “65 times” with the Commission. Vestager announced the conclusions of his investigation a few days before the European Digital Markets law comes into force, which prohibits conduct of this type by internet giants.
