EU takes $2bn bite out of Apple for 'abusive' App Store rules on music streaming apps
"Apple’s rules muzzled Spotify... from sharing with our users directly in our app about various benefits—denying us the ability to communicate with them..."
Apple has been fined €1.8 billion ($2bn) after the European Commission ruled the US firm abused its dominant position in the market for the distribution of music streaming apps to iPhone and iPad users through its App Store.
According to the Commission, Apple prevented developers from informing iOS users about alternative and cheaper music subscription services available outside of the app.
This meant that other streaming service providers were unable to advertise cheaper subscription deals outside of Apple's app store.
Apple said it would appeal the ruling.
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This is illegal under the "anti-steering" provisions of the EU antitrust rules. According to the Commission's report, Apple's conduct lasted for for almost ten years, and may have led many iOS users to pay significantly higher prices for music streaming subscriptions because of the high commission fee imposed by Apple on developers and passed on to consumers.
The Commission also concluded that Apple's anti-steering provisions led to non-monetary harm in the form of a degraded user experience. The report notes that "iOS users either had to engage in a cumbersome search before they found their way to relevant offers outside the app, or they never subscribed to any service because they did not find the right one on their own."
"For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store," Margrethe Vestager, Executive Vice-President in charge of competition policy stated in an EU press release. "They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem."
Music streaming service Spotify had led the charge against Apple's actions, and released an exuberant statement, welcoming the EU's decision.
"Apple’s rules muzzled Spotify and other music streaming services from sharing with our users directly in our app about various benefits—denying us the ability to communicate with them about how to upgrade and the price of subscriptions, promotions, discounts, or numerous other perks," stated Spotify.
"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," the streaming service added.
Responding to the fine, Apple said it would appeal. It claimed that the EU's decision came "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 tech giant has stated that Spotify, the primary advocate for the decision, was also its biggest beneficiary - having met the Commision more than 65 times during the investigation.
It added that Spotify has a dominant market share, even on iOS devices- and does not pay Apple anything, as it chooses to sell subscriptions on its website and not the app store which is subject to commissions.
