EU fines Apple $2 billion over App Store policy  

US tech giant Apple has been fined over €1.8 billion (about $2 billion) by the European Commission for violating the EU’s antitrust rules over music streaming.

The commission ruled that Apple abused its dominant position in the market for the distribution of music streaming apps to iPhone and iPad users through its App Store. 

It put restrictions on app developers, preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the app, the order said. 

This is illegal under EU antitrust rules, the commission 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, so today we have fined Apple over €1.8 billion,” Margrethe Vestager, executive vice-president in charge of competition policy at the commission, said. 

Apple shares declined about 3% in New York to their lowest level since November.

The European Commission’s decision came on a complaint by Swedish music streaming service Spotify, which expressed satisfaction at the decision. 

“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 statement. 

“Our work will not be done until we succeed in securing a truly fair digital marketplace everywhere and our commitment to helping to make this a reality remains unwavering,” it added.

Apple 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 Cupertino-based company said that Spotify has a 56% share of Europe’s music streaming market and “pays Apple nothing for the services that have helped make them one of the most recognisable brands in the world.” 

“A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world,” it said in a statement. 

What does the European Commission order say?

The commission’s investigation found that Apple bans music streaming app developers from fully informing iOS users about alternative and cheaper music subscription services available outside of the app and from providing any instructions about how to subscribe to such offers. 

Apple’s anti-steering provisions ban app developers from informing iOS users within their apps about the prices of subscription offers available on the internet outside of the app and informing them about the price differences between in-app subscriptions sold through Apple’s in-app purchase mechanism and those available elsewhere. 

The app developers also cannot include links in their apps leading iOS users to the app developer’s website on which alternative subscriptions can be bought. 

App developers were also prevented from contacting their own newly acquired users, for instance by email, to inform them about alternative pricing options after they set up an account, the European Commission said. 

The fine was imposed after the investigation concluded that Apple’s anti-steering provisions amount to unfair trading conditions, are neither necessary nor proportionate for the protection of the company’s commercial interests in relation to the App Store, and negatively affect the interests of iOS users.

Apple’s conduct, lasting for almost ten years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions, the commission concluded. 

The Commission concluded that the total amount of the fine of over €1.8 billion is proportionate to Apple’s global revenues and is necessary to achieve deterrence.

Apple has also been asked to remove the anti-steering provisions and to refrain from repeating the action or from adopting similar practices.