The European Union has slapped a massive $2 billion fine on Apple after finding that the tech giant wrongly favored its own music streaming service over rivals like Spotify.
Apple banned app developers from “fully informing iOS users about alternative and cheaper music subscription services outside the app,” according to the European Commission, the 27-nation bloc’s executive arm and top antitrust enforcer.
That is illegal under EU antitrust rules. Apple behaved this way for nearly a decade, which meant many users paid “significantly higher prices for music streaming subscriptions,” the commission said.
The fine follows a long-term investigation following a complaint from Spotify five years ago.
In response to the fine, Apple released a statement claiming the commission failed to find “any credible evidence of consumer harm, and ignores the reality of a market that is thriving, competitive and growing rapidly.”
At a press conference Monday, Margrethe Vestager, pictured here, the executive vice president of the European Commission, accused Apple of “misusing” its position
The fine comes five years after Spotify first complained that Apple wrongly gave preference to its own music streaming
In response to the fine, Apple said the evidence did not support the committee’s decision and that Spotify pays ‘nothing’ for a presence in the app store
“While we respect the European Commission, the facts simply do not support this decision,” the statement continued. Apple has promised to appeal the ruling.
The statement goes on to say that Spotify pays Apple “nothing for the services that have helped make them one of the most recognizable brands in the world.”
“We are proud to play a key role in supporting Spotify’s success – as we have done for developers of all sizes,” the statement said.
At a press conference Monday, Margrethe Vestager, executive vice president of the European Commission, accused Apple of “abusing” its position.
‘Apple has abused its dominant position in the market for ten years by distributing music streaming apps through the App Store. From now on, Apple will have to let music streaming developers communicate freely with their own users.’
“(The fine) reflects both Apple’s financial power and the harm Apple’s behavior has caused to millions of European users,” Vestager said.
The EU has led global efforts to crack down on Big Tech companies, including a series of multi-billion dollar fines on Google and charging Meta with disrupting the online advertising market.
The commission also opened a separate antitrust investigation into Apple’s mobile payments service.
The committee’s investigation initially focused on two areas of concern.
One of these was the iPhone maker’s practice of forcing app developers who sell digital content to use its internal payment system, which charges a 30 percent commission on all subscriptions.
But the EU later dropped that to focus on how Apple is preventing app makers from telling their users about cheaper ways to pay for subscriptions that don’t require an app.
The investigation found that Apple banned streaming services from telling users how much subscription offers outside their apps cost, including links in their apps to pay for alternative subscriptions or even emailing users to tell them about different pricing options.
The fine comes the same week that new EU rules aimed at preventing tech companies from dominating digital markets come into effect.
The Digital Markets Act, which comes into effect on Thursday, imposes a series of do’s and don’ts on “gatekeeper” companies including Apple, Meta, Google parent Alphabet and TikTok parent ByteDance – under the threat of steep fines.
The DMA’s provisions are intended to prevent tech giants from engaging in the kind of behavior at the heart of the Apple investigation.
Apple has already revealed how it will comply, including by allowing iPhone users in Europe to use app stores other than its own and allowing developers to offer alternative payment systems.
The commission also opened a separate antitrust investigation into Apple’s mobile payments service, and the company has pledged to open its tap-and-go mobile payment system to rivals to resolve the problem.