EU hits Apple with €1.8 billion fine over abusive App Store rules targeting music streaming market

The European Commission has dealt a substantial blow to tech giant Apple, imposing a hefty fine of over €1.8 billion for allegedly abusing its dominant position in the market for distributing music streaming apps to iOS users through the App Store. 

The Commission’s investigation revealed that Apple had implemented restrictive measures, known as ‘anti-steering provisions,’ preventing app developers from informing users about alternative and potentially cheaper music subscription services outside the App Store. 

EU competition chief Margrethe Vestager emphasized that these restrictions hindered European consumers from making informed choices, potentially resulting in some paying more for services without awareness of lower-cost alternatives. The Commission deemed Apple’s rules as unfair trading conditions, asserting that they were neither necessary nor proportionate. This substantial penalty, far exceeding a previous anticipated €500 million, reflects both a monetary fine for rule breaches and an added lump sum to account for the non-monetary harm inflicted on consumers.

The antitrust case originated from a complaint filed by Spotify in March 2019, accusing Apple of intentionally limiting choice and stifling innovation within the App Store. The European Union initiated a formal investigation in June 2020, expressing concerns about Apple’s conditions distorting competition, especially anti-steering provisions preventing developers from informing users of more cost-effective payment methods outside the App Store. The Commission refined the case in April 2021, narrowing its focus to anti-steering provisions and excluding a prior charge related to Apple’s mandatory use of its payment processing technology for music streaming apps.

Apple, in response, vehemently criticized the EU’s decision in a blog post, contesting the lack of credible evidence supporting consumer harm and dismissing the reality of a thriving, competitive, and rapidly growing market. While the financial implications of the fine may not significantly dent Apple’s colossal resources, the EU’s forceful action underscores the regulatory scrutiny facing tech giants concerning fair competition practices in the digital marketplace.