European Commission hits Apple with $2bln antitrust fine after Spotify complaint

According to the ruling,”for a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store… by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem. This is illegal under EU antitrust rules,” said Margrethe Vestager, Executive Vice-President in charge of competition policy.

The EC, which considers the fine to be “proportionate to Apple’s global revenues” – it amounts to 0.5% of the company’s annual turnover – and “necessary to achieve deterrence,” has ordered the firm led by Tim Cook to stop restricting its competitors and to refrain from engaging in similar practices. “If Apple abuses its dominant position, we will detect such illegal behavior, we will bring it to an end and we will punish Apple for it,” Vestager warned at a press conference.

The EC attributed Apple’s dominance in the market to the fact that the only way for iPhone or iPad users to download online music apps, such as Spotify – which filed the complaint in 2019 -, is through its own App Store. Apple charges its competitors a 30% commission on the subscription plans they offer to users who can only access them through the App Store, while these competitors pass the premium price on to users, making alternative options more expensive than Apple Music, the app installed by default on iPhones and iPads.

In addition, the EC has found that the App Store rules prevent Apple Music’s competitors from informing iOS users about subscription prices or price differences outside the App Store, including links to the alternative service’s website. These restrictions are “neither necessary nor proportionate for the protection of Apple’s commercial interests,” the EC said.