Business News

Apple fined nearly $2 billion by European Union for music streaming competition

[ad_1]

LONDON –

The European Union imposed its first antitrust sanction on Apple on Monday, fining the U.S. tech giant nearly $2 billion for violating European competition laws by unfairly favoring its own music streaming service over to its competitors.

Apple has banned app developers from “fully informing iOS users about alternative and cheaper music subscription services outside of the app,” the European Commission, the bloc’s executive body, said. 27 countries and the main agency responsible for enforcing antitrust laws.

This is illegal under EU antitrust rules. Apple behaved this way for nearly a decade, meaning many users paid “significantly higher prices for music streaming subscriptions,” the commission said.

The 1.8 billion euro fine follows a long-running investigation sparked by a complaint from Swedish streaming service Spotify five years ago.

The EU has led global efforts to crack down on big tech companies, including imposing a series of multibillion-dollar fines on Google and accusing Meta of distorting the online classifieds market. The commission also opened a separate antitrust investigation into Apple’s mobile payments service.

Apple responded to the commission and Spotify, saying it would appeal the sanction.

“The decision was made despite the Commission’s failure to uncover any credible evidence of consumer harm and ignores the realities of a thriving, competitive and rapidly growing market,” the company said in a statement.

He said Spotify stands to benefit from the ruling, saying the Swedish streaming service which holds 56% of the European music streaming market and does not pay Apple for use of its App Store has met 65 times with the commission over eight years.

“Ironically, in the name of competition, today’s decision only consolidates the dominant position of a successful European company that is the undisputed leader in the digital music market,” Apple said.

The commission’s investigation initially focused on two concerns. One is the iPhone maker’s practice of requiring app developers that sell digital content to use its internal payment system, which charges a 30% commission on all subscriptions.

But the EU then abandoned that idea to focus on how Apple prevents app makers from informing their users about cheaper ways to pay for subscriptions that don’t involve going through an app.

The investigation found that Apple had banned streaming services from informing users about the cost of subscription offers outside of their apps, including links in their apps to pay for alternative subscriptions or even sending emails. Emails to users to inform them of different pricing options.

The fine comes the same week as new EU rules are due to come into force, aimed at preventing technology companies from dominating digital markets.

The Digital Markets Act, set to take effect Thursday, imposes a set of do’s and don’ts on “gatekeeper” companies, including Apple, Meta, Google’s parent company Alphabet, and ByteDance, parent company of TikTok, under threat of heavy fines.

The DMA’s provisions are intended to prevent tech giants from committing the type of behavior that is at the heart of the Apple investigation. Apple has already revealed how it would comply, including allowing iPhone users in Europe to use app stores other than its own and allowing developers to offer alternative payment systems.

The commission also opened a separate antitrust investigation into Apple’s mobile payments service, and the company promised to open its tap-and-go mobile payments system to competitors in order to resolve the issue.

[ad_2]

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button