Apple has been handed an EU antitrust fine of over 1.8 billion euros ($1.95 billion) on Monday, its first ever. This is because they prevented Spotify and other music streaming services from informing users of payment options outside its App Store. The European Commission’s decision came after a 2019 complaint by Swedish music streaming service Spotify over this restriction and Apple’s 30% App Store fees. The EU competition enforcer said Apple’s restrictions constituted unfair trading conditions, which is a relatively novel argument in an antitrust case. This argument was also used by the Dutch antitrust agency in a decision against Apple in 2021, in a case brought by dating app providers.
The EU competition enforcer added an additional lump sum of 1.8 billion euros to the basic amount as a deterrent to Apple. This is because a significant part of the harm caused by Apple’s conduct was non-monetary. However, it did not reveal what the basic amount was. EU antitrust chief Margrethe Vestager said, “For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store. They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem. This is illegal under EU antitrust rules.”
Apple criticized the EU decision and said it would challenge it in court. The company said, “The decision was reached despite the Commission’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast.” The primary advocate for this decision, and the biggest beneficiary, is Spotify, a company based in Stockholm, Sweden. Spotify has the largest music streaming app in the world and met with the European Commission more than 65 times during this investigation. The company said the Swedish company pays no commission to Apple as it sells its subscriptions on its website and not on Apple’s App Store.
Vestager’s order to Apple to remove its App Store restrictions echoes the same requirement under new EU tech rules known as the Digital Markets Act. Apple has to comply with this on March 7. However, Apple’s fine is about a quarter of the 8.25 billion euro fines the EU regulator meted out to Alphabet’s Google in three cases in the previous decade.