New Delhi: The European Commission has imposed a substantial fine of over €1.8 billion on tech giant Apple Inc. for breaching antitrust regulations related to its App Store’s distribution of music streaming apps within the European Economic Area (EEA). The Commission’s investigation concluded that Apple’s actions constituted an abuse of its dominant market position.
Restrictions imposed by Apple on app developers, prohibit them from informing iOS users about alternative and potentially cheaper music subscription services available outside the App Store. These restrictions, known as ‘anti-steering provisions,’ were found to be illegal under EU antitrust rules.
The EU’s antitrust regulator stated, “Apple’s conduct, which lasted for almost ten years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions because of the high commission fee imposed by Apple on developers and passed on to consumers.”
The investigation was triggered by a complaint from Spotify in 2019, leading to a broad commission investigation into Apple in 2021. The focus of the probe was narrowed last year to concentrate on Apple’s actions to prevent apps from informing users about rival music subscription options.
Commission vice president Margrethe Vestager emphasised, “For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store. We have ordered Apple to remove the necessary provisions and to refrain from similar practices in the future.”
In response, Apple expressed strong disagreement with the Commission’s decision and announced its intention to appeal. The company argued that the decision was made despite the lack of credible evidence of consumer harm and disregarded the realities of a competitive and growing market.
“While we respect the European Commission, the facts simply don’t support this decision. And as a result, Apple will appeal,” the company stated.
The Commission’s investigation unveiled Apple’s tight control over the App Store, the primary platform for developers to reach iOS users across the EEA. This gives Apple a significant advantage in dictating terms and conditions to developers.
The investigation also revealed that Apple effectively prevents music streaming app developers from fully disclosing alternative subscription services and from providing instructions on how users can subscribe to them. By limiting information about alternative options, Apple potentially maintains higher prices for its own services while obstructing potential rivals from offering competitive alternatives.
