The lucrative online music business has been in the crosshairs of the European Commission for some time and could be about to make a big move. Brussels is preparing a sanction to Apple for abuse of a dominant position in its service, following a complaint by Spotify, with a fine that could reach 500 million euros.
In 2019, the Swedish platform Spotify denounced Apple because it considered that it limited the options of users to access music online and “stifled” innovation. Since then, the competition services of the Community Executive have studied the allegations and in 2021 the Executive announced the opening of an investigation. Five years after the complaint, the long legal battle could come to an end and Brussels is studying the first sanction on the Cupertino-based company for a value of 500 million euros, according to information from the Financial Times newspaper. When Brussels announced the investigation, it asked Apple to clarify concerns, specifically about contractual restrictions that the Commission says Apple imposes on developers of online music apps.
Then the vice president in charge of Competition, the Danish Margrethe Vestager, accused Apple of distorting competition in the online music market. “Our preliminary conclusion is that Apple infringes the Community regulations on competition”, he denounced. According to the Executive, the multinational of the bitten apple prevents developers from informing iPhone and iPad users of the existence of alternative music subscription services with more advantageous prices than those of Apple Music, the installed app by default on these devices.
The App Store is the only way for users of Apple devices to download apps, so developers and platforms like Spotify must comply with the tech giant’s obligations to access these consumers. In addition, Apple keeps a 30% commission for each subscription made through its store, as the Executive assured. This caused, according to the Commission’s opinion, that companies such as Spotify ended up passing this commission on to users, so that they paid a higher price for the subscription plan offered by Apple Music.
During this time, and taking into account the concerns of Brussels, Apple has made changes to the online music policy, although the European Commission considers that they do not end all the problems. According to the newspaper, the fine could be announced in early March, although it is only one of many disagreements between Spotify, which has more than 500 million users worldwide, and Apple Music, which has 95 million subscribers.
It would be the first time that the European Commission has fined Apple for a case of abuse of a dominant position, although it would be another episode in the tug-of-war between Brussels and the big tech giants. The main battle it has waged in recent years has been against Google, with fines exceeding 8,000 million euros, with appeals before the European courts. However, Apple received a penalty in 2020 in France with a fine of 1.1 billion euros, but it was reduced to 372 million, after an appeal.
