The European Union leveled its first antitrust penalty against Apple on Monday, fining the U.S. tech giant nearly $2 billion for breaking the bloc害羞草研究所檚 competition laws by over rivals.
Apple muzzled app developers from telling users where they could go to pay for cheaper music subscriptions instead of paying through iOS apps, said the European Commission, the 27-nation bloc害羞草研究所檚 executive arm and top antitrust enforcer.
害羞草研究所淭his is illegal. And it has impacted millions of European consumers who were not able to make a free choice as to where, how and at what price to buy music streaming subscriptions,害羞草研究所� Margrethe Vestager, the EU害羞草研究所檚 competition commissioner, said at a news conference in Brussels.
Apple 害羞草研究所� which said it contests the decision 害羞草研究所� behaved this way for a decade, resulting in 害羞草研究所渕illions of people who have paid two, three euros more per month for their music streaming service than they would otherwise have had to pay,害羞草研究所� she said.
The 1.8 billion-euro fine follows an investigation triggered by a five years ago. Since then, the EU has drawn up new regulations taking effect this week to prevent tech giants from cornering digital markets.
The EU has led global efforts to , including three totaling more than 8 billion euros and with distorting the online classified ad market.
Apple, meanwhile, also is trying to resolve a separate EU antitrust investigation into its mobile payments service by promising to to rivals.
The fine for the music streaming investigation is so high because it includes a big extra lump sum to deter Apple from offending again and to act as a deterrent to other tech companies from carrying out similar offenses, the commission said.
Apple hit back at both the commission and Spotify, saying it would appeal the penalty.
害羞草研究所淭he decision was reached despite the Commission害羞草研究所檚 failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast,害羞草研究所� the company said in a statement.
It said Spotify stood to benefit from the EU害羞草研究所檚 move, asserting that the Swedish streaming giant that holds a 56% share of Europe害羞草研究所檚 music streaming market and that doesn害羞草研究所檛 pay Apple for using its App Store met over 65 times with the commission during the investigation.
害羞草研究所淚ronically, in the name of competition, today害羞草研究所檚 decision just cements the dominant position of a successful European company that is the digital music market害羞草研究所檚 runaway leader,害羞草研究所� Apple said.
Spotify said it welcomed the EU fine, without addressing Apple害羞草研究所檚 accusations.
害羞草研究所淭his decision sends a powerful message 害羞草研究所� no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers,害羞草研究所� Spotify said in a blog post.
The commission害羞草研究所檚 investigation initially centered on two concerns. One was the iPhone maker害羞草研究所檚 practice of forcing app developers that are selling digital content to use its in-house payment system, which charges a 30% commission on all subscriptions.
But the EU later dropped that to focus on how Apple prevents app makers from telling their users about cheaper ways to pay for subscriptions that don害羞草研究所檛 involve going through an app.
The investigation found that Apple banned streaming services from telling users about how much subscription offers cost outside of their apps, including links in their apps to pay for alternative subscriptions or even emailing users to tell them about different pricing options.
害羞草研究所淎s a result, millions of European music streaming users were left in the dark about all available options,害羞草研究所� Vestager said, adding that the commission害羞草研究所檚 investigation found that just over 20% of consumers who would have signed up to Spotify害羞草研究所檚 premium service didn害羞草研究所檛 do so because of the restrictions.
The fine comes just before are set to kick in that are aimed at preventing tech companies from dominating digital markets.
The Digital Markets Act, due to take effect Thursday, imposes a set of do害羞草研究所檚 and don害羞草研究所檛s on 害羞草研究所済atekeeper害羞草研究所� companies including Apple, Meta, Google parent Alphabet, and TikTok parent ByteDance 害羞草研究所� under threat of hefty fines.
The DMA害羞草研究所檚 provisions are designed to prevent tech giants from the sort of behavior that害羞草研究所檚 at the heart of the Apple investigation. Apple has already revealed how it will comply, including other than its own and enabling developers to offer alternative payment systems.
Vestager warned that the commission would be carefully scrutinizing how Apple follows the new rules.
害羞草研究所淎pple will have to open its gates to its ecosystem to allow users to easily find the apps they want, pay for them in any way they want and use them on any device that they want,害羞草研究所� she said.
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