Apple was fined 1.84 billion euros (about $2 billion) by EU antitrust regulators over its App Store rules and was told it could not stop music services from advertising cheaper subscription deals outside Apple stores.Today’s fine news was earlier provided by Financial Timesand comes before Apple makes sweeping changes to iPhone app distribution rules due to the European Union’s Digital Markets Act.
The European Commission said in a press release on Monday that its investigation found that “Apple prohibits developers of music streaming apps from fully informing iOS users of alternative and cheaper music subscription services available outside the apps,” in addition to blocking apps. Providers share instructions on how to subscribe to such offers.
“For a decade, Apple has abused its dominant position in distributing music streaming apps through the App Store,” said Margrethe Vestager, executive vice president for competition policy. “They do this by restricting developers from informing consumers about alternative, cheaper music services available outside the Apple ecosystem. This is illegal under EU antitrust rules, so today we fined Apple more than 18 fines of 100 million euros.”
The commission said it took into account “the duration and severity of the infringement” as well as Apple’s total turnover and market capitalization when determining the fine, as well as “incorrect information” submitted by Apple during the administrative proceedings.
Apple has since responded harshly to the ruling, saying the commission failed to “find any credible evidence” of consumer harm or anti-competitive behavior. The company also said that Spotify wanted to “rewrite the rules of the App Store” to gain a competitive advantage without paying Apple any fees, despite Apple claiming that the App Store is critical to Spotify’s current market dominance. Apple said it would appeal the decision.
The EU investigation dates back to 2020 and was announced after Spotify filed an antitrust complaint against Apple over its so-called “Apple tax.” In addition to complaining about the 30% commission, Spotify has taken issue with App Store rules, saying they limit communication with customers and limit its ability to market and promote deals.
Over time, the committee’s investigation has focused on App Store rules that prevent developers from telling users alternatives to Apple’s own payment options. In February 2023, the Commission stated that its “preliminary view” was that Apple’s “counter-bootstrap obligations” represented “unfair trading conditions” and that its App Store policy was “neither necessary nor proportionate” and may It will cause users to pay more and consumers will have limited choices.
Apple has already made some concessions. It said that by 2021, developers will be able to promote payment methods outside of iOS apps through communication methods such as email. Then, in early 2022, it began allowing developers to link to their own websites from the iOS app itself. But the second change only applies to so-called “reader apps” from services like Netflix, Kindle or Spotify, which are primarily designed to provide access to digital content, and developers need to ask for “rights” before they can add external Link. BloombergEarlier reports on the EU antitrust fine said Spotify criticized Apple’s rule changes as “just for show.”
The EU fine comes as Apple is preparing to overhaul app distribution rules in the EU to comply with the Digital Markets Act (DMA) from March 7, allowing third-party app markets on the iPhone for the first time. But app developers have been critical of Apple’s practices, which include charging commissions of up to 17% to developers who use their own payment methods or linking to their own websites, and charging annual fees after the first million apps are installed. Fee of 0.5 euros. Spotify said the changes were “an unworkable alternative that will kill [developers’] Start your business now. ”
On March 1, Spotify also published an open letter supported by 33 other companies and associations, highlighting concerns about Apple’s DMA compliance. Spotify claimed in the letter that the EU’s response to the proposal will “be a litmus test for the DMA and whether it can deliver benefits to European citizens and economies.”
At the same time, due to legal challenges from Apple, a U.S. court also ruled that Apple must allow developers to link to other payment methods. fort night Developer Epic Games. But when Apple does start allowing developers to link, it insists it will still take a commission of up to 27% from any digital purchases — a slight drop from its usual 30% tax rate. Critics of Apple criticized the changes, which Spotify said showed Apple “will do whatever it takes to protect the profits they make from developers and consumers under their App Store monopoly.”
In addition to its investigation into Apple’s App Store policies, the European Commission has also been studying Apple’s policy of limiting the iPhone’s tap-to-pay NFC (near field communication) to its own wallet and payment services. The investigation results show that Apple has proposed allowing third-party mobile wallets and payment providers to use the iPhone’s NFC function for payments.
Updated March 4 at 8:00 a.m. ET: Added Apple’s response.
