The European Commission has imposed a fine of 1,804 million euros on Apple for favoring its own streaming music playback services over those of rival companies, the first sanction that the community executive imposes on the Californian company and a much larger amount. higher than had been speculated in recent weeks. “Apple applied restrictions to app developers that prevented them from informing users of its iOS operating system of the existence of music subscription services existing outside the app,” explained today the vice president of the community executive and head of Competition, Margrethe Vestager, who has ordered the company to immediately cease these practices.
“This is illegal under European antitrust laws” and has prevented “millions of European consumers” from making informed decisions in this regard, Vestager added at a press conference held today in Brussels. The investigation began following a complaint filed by Spotify, the main online music platform in Europe, which has denounced the 30% percentage that Apple imposes on all sales of subscription services that are made within the apps and other potential restrictions on competition. Brussels considers that the American company has engaged in “unfair commercial practices” against its rivals to favor its own streaming music app, Music.
Apple imposes “non-negotiable” conditions on app developers, such as prohibiting them from informing their users about the different subscription options inside or outside their own apps, including links to these services or contacting them directly, for example by email, about other things. subscription alternatives. Brussels does not question the percentage that Apple charges app developers but rather the restrictions it applies to them. This extra cost, however, makes the products more expensive, which is why Spotify and other companies have given up attracting subscribers in this way and it is only possible to contract their services in their online version.
The community executive maintains that these provisions have especially harmed smaller operators, such as Deezer or SoundCloud. Apple must put an end to these practices “starting today,” Vestager stressed. The mere application of European rules to fine conduct contrary to competition rules would have resulted in a tiny amount, equivalent to “a parking fine” for Apple, but Brussels has also applied provisions that allow it to add an additional amount so that the sanction has a dissuasive nature. The final amount of the penalty, 1,804 million euros, represents 0.5% of the company’s global business volume.
Until now, Apple had escaped the punishments imposed for violating European competition law on Google, Amazon, Facebook and other internet giants. Everything indicates that the company will appeal the fine before European Justice. After the Financial Times newspaper reported in mid-February that Brussels was preparing a sanction of around 500 million euros for the company, Apple counterattacked by replying that the European Commission has been looking for a theory to fine it for ten years. Today, the company has issued a harsh statement in response to the Commission’s decision, accusing it of having failed to uncover “any credible evidence” that harm has been caused to consumers” as well as of “ignoring the realities of a market that is booming, competitive and growing rapidly.
The “main beneficiary” of the decision, adds Apple, is Spotify, “the largest streaming platform in the world”, whose officials have met “more than 65 times with the European Commission during this investigation.” The company, based in Stockholm, has a 56% share of the streaming music market in Europe, reminds Apple (in this sense, Brussels has taken as a reference not the market share of each streaming platform but the weight of the App Store among Apple users when accessing these services).
The company run by Tim Cook also assures that Brussels has tried to build this case based on three different lines of arguments until reaching today’s decision. But the tensions between the Cupertino company and Vestager actually go back a long way: in 2016, Brussels condemned Apple to pay 13 billion euros into the coffers of Ireland in the form of unpaid taxes, a sanction that was annulled in 2020. by the Court of Justice of the EU in a devastating decision that Brussels has appealed and is pending the final verdict of the Luxembourg judges.
The fine from Brussels to Apple for its commercial practices in the streaming music sector marks the beginning of a week that Apple and other technology companies have had marked in red for months. On Wednesday, the European Digital Markets Law comes into full force, setting new obligations for technology companies and service providers on digital platforms. In the case of Apple, the new rules force the company to open its operating system to alternative app stores and allow downloading them outside the official App Store. The company must allow them to have their own payment systems, in addition to the Apple Pay option. Apple has finally escaped being designated as a “gatekeeper” on the iMessage messaging platform, so it will not be obliged to make it compatible with other rival apps. The company maintains that the new European regulations, with its openness obligations, represent “inevitable privacy and security risks” for users but claims to have taken the necessary measures to minimize them.
