The European Union has slapped a hefty antitrust fine of over €1.8 billion, equivalent to around $1.95 billion, on the US tech giant Apple Inc. for violating app store regulations. The fine comes as a result of Apple’s abuse of its dominant position in the market, specifically concerning the app store’s handling of music streaming platforms for iPhone and iPad users.
The EU investigation revealed that Apple had imposed restrictive measures on app developers, preventing them from informing iOS users about alternative and cheaper music streaming options available outside of the app store. These restrictions, referred to as ‘anti-steering provisions,’ were deemed unlawful under the European Commission’s antitrust regulations.
Additionally, developers were prohibited from discussing price disparities between the Apple app store and external platforms with users. They were also barred from reaching out to new users via email or any other means to inform them about alternative subscription costs.
According to the European Commission, Apple’s behavior, spanning nearly a decade, likely resulted in many iOS users paying inflated prices for music streaming subscriptions due to the high commission fees imposed by Apple on developers, which were passed on to consumers in the form of higher subscription rates on the Apple App Store.
The investigation was prompted by a complaint filed by Spotify in 2019. After two years, in 2021, the EU commenced its inquiry, narrowing its focus last year to specifically scrutinize Apple’s actions in prohibiting apps from informing users about cheaper and alternative music subscription services.
This fine represents one of the largest penalties ever imposed on a technology company by the European Union. Apple has vehemently criticized the EU’s decision, asserting that it was made without credible evidence of consumer harm and disregards the competitive and rapidly growing nature of the market.