Newest fine from the EU targeting Apple

European Union antitrust regulators fined Apple €1.84 billion (roughly $2 billion) for violating their App Store policies. They also informed Apple that it was unable to prevent music services from promoting lower-cost subscription offers outside of Apple stores. The Financial Times first broke the story of today's fine, which comes before Apple drastically changed the guidelines for iPhone app distribution in response to the EU's Digital Markets Act.

The EU Commission announced in a press release on Monday that the results of its investigation showed that in addition to prohibiting app providers from disclosing subscription details, Apple "bans music streaming app developers from fully informing iOS users about alternative and cheaper music subscription services available outside of the app."

Margrethe Vestager, Executive Vice-President in charge of competition policy, stated that Apple "abused its dominant position in the market for the distribution of music streaming apps through the App Store" for ten years. "They achieved this by preventing developers from alerting users about substitute, less expensive music services that are accessible outside of the Apple network. Since this violates EU antitrust laws, Apple has been fined more than €1.8 billion today.

The Commission claimed that in addition to considering Apple's overall revenue and market capitalization, it also considered the "duration and gravity of the infringement" and the "incorrect information" that the company had provided during the administrative procedure.

Since then, Apple has responded sharply to the decision, claiming that the Commission was unable to "discover any credible evidence" of anti-competitive or consumer-harming behavior. Additionally, the business claims that Spotify intends to "rewrite the rules of the App Store" in order to obtain a competitive edge, all the while refusing to pay Apple, even though Apple maintains that the App Store was essential to Spotify's present dominance of the market. Apple claims that it will challenge the ruling.

The European Union initiated an investigation in 2020, following a complaint filed by Spotify regarding Apple's alleged "Apple Tax" in violation of antitrust laws. In addition to protesting about the thirty percent commission, Spotify also took issue with restrictions on customer communications and its ability to market and promote deals as imposed by the App Store.

The commission's inquiry has focused over time on App Store policies that prohibit developers from informing users of alternatives to Apple's payment methods. The commission stated in February 2023 that its "preliminary view" was that Apple's "anti-steering obligations" constitute "unfair trading conditions." It further contended that Apple's App Store policies were "neither necessary nor proportionate," which could lead to higher prices for users and less options for them.

Apple has already given in on a few things. It stated in 2021 that developers could use email and other forms of communication to promote payment options outside of the iOS app. Early in 2022, however, it began to permit developers to create links from within the iOS apps themselves to their own websites. But developers had to request an "entitlement" before they could add an external link, and this second change only applied to so-called "reader apps" for services like Netflix, Kindle, or Spotify that are primarily designed to provide access to digital content. According to Bloomberg, which first revealed the EU's antitrust fine, Spotify called Apple's new regulations "just for show."