London, (BERITAPOLITIK.ONLINE) – In a landmark decision, the European Union (EU) has levied its first-ever antitrust penalty against tech titan Apple, imposing a hefty fine nearing $2 billion. The EU alleges that Apple breached competition laws by favoring its proprietary music streaming service, thereby impeding fair competition within the market.
Margrethe Vestager, the EU’s competition commissioner, underscored Apple’s practice of preventing app developers from informing users about more cost-effective music subscription options, affecting millions of European consumers. This wrongdoing persisted for a decade, resulting in users paying significantly higher monthly fees for music streaming services.
“This is illegal. And it has impacted millions of European consumers who were not able to make a free choice as to where, how and at what price to buy music streaming subscriptions,” Margrethe stated at a press conference on Monday (04/03/2024) in Brussels.
The substantial 1.8 billion-euro fine, triggered by a complaint from Spotify, underscores the EU’s commitment to curbing the dominance of Big Tech. The investigation, initiated five years ago, has led to new regulations aimed at preventing tech giants from monopolizing digital markets, effective this week.
The EU has been a frontrunner in global efforts to regulate major tech companies, imposing significant fines on Google and charging Meta with distorting the online classified ad market.
Apple, currently disputing the decision, faces another antitrust investigation in the EU regarding its mobile payments service. The high fine for the music streaming case serves as a deterrent against future offenses and signals the EU’s determination to prevent similar transgressions by other tech companies.
In response, Apple criticized the decision, arguing a lack of credible evidence of consumer harm and asserting that the market is competitive and flourishing. The company plans to appeal the penalty, stating that the ruling reinforces Spotify’s dominant position in the European music streaming market.
“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,” Apple said in a statement.
Spotify welcomed the EU fine, refraining from addressing Apple’s counterarguments. The streaming giant sees the decision as a powerful message against abusive use of power by monopolies, emphasizing that no company, even one as dominant as Apple, should control how others interact with their customers.
“This decision sends a powerful message — no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers,” Spotify said in a blog post.
The EU’s investigation initially focused on Apple’s practice of compelling app developers to use its in-house payment system. However, the scrutiny shifted to how Apple prevents app makers from informing users about cheaper subscription options outside the app.
The investigation revealed that Apple prohibited streaming services from disclosing subscription costs outside their apps, leaving European music streaming users unaware of alternative options.
“As a result, millions of European music streaming users were left in the dark about all available options,” Vestager said, adding that the commission’s investigation found that just over 20% of consumers who would have signed up to Spotify’s premium service didn’t do so because of the restrictions.
The fine precedes the implementation of the Digital Markets Act (DMA), set to take effect soon, which imposes regulations on “gatekeeper” companies, including Apple. These rules aim to prevent anti-competitive practices and will require Apple to open its ecosystem to allow users more flexibility in finding and paying for apps.
Vestager cautioned that the EU would closely monitor Apple’s compliance with the new rules, emphasizing the need for the tech giant to enable users to easily access and use apps across different devices, promoting fair competition in the digital market.
“Apple will have to open its gates to its ecosystem to allow users to easily find the apps they want, pay for them in any way they want and use them on any device that they want,” she said.
