EU Imposes Landmark Fine on Apple for App Store Restrictions
On Monday, Brussels imposed a fine of 1.84 billion euros ($2 billion) on Apple for impeding competition from music streaming competitors through restrictions on its App Store.
This marks Apple’s first penalty for violating EU regulations. The initial penalty of 40 million euros was significantly increased with an added deterrent sum, a novel approach by the European Union’s antitrust authorities. The European Commission had accused Apple last year of preventing Swedish streaming giant Spotify and other similar services from informing users about payment alternatives outside of the App Store, following Spotify’s complaint in 2019. 
On Monday, it was stated that Apple’s limitations were considered unfair trading conditions, a somewhat new argument in an antitrust case. The same argument was utilized by the Dutch antitrust agency in a 2021 ruling against Apple regarding dating app providers. The order required Apple to discontinue such practices.
Apple has declared its intention to contest the decision. A verdict from the General Court in Luxembourg, the second-highest court in Europe, is expected to be years away. In the interim, Apple must adhere to the EU’s directive and pay the fine.
Decline in stocks
Monday afternoon, Apple’s stock experienced a 3.2% decline, reaching $173.88. The imposed fine was nearly four times higher than the 500 million euros that sources familiar with the matter had informed Reuters they anticipated the European Commission to levy against Apple.
This fine consisted of a base amount of 40 million euros, which European Competition Commissioner Margarethe Vestager likened to a “parking ticket” for the U.S. tech giant, alongside an additional 1.8 billion euros intended as a deterrent. Vestager noted that the total fine of 1.84 billion euros equated to 0.5% of Apple’s global revenue.
Apple Criticizes EU Decision While Spotify Applauds Justice
Apple issued a statement criticizing the decision, asserting that it was reached despite the Commission’s failure to uncover any credible evidence of consumer harm. Apple also argued that the decision disregarded the realities of a market that is flourishing, competitive, and experiencing rapid growth. Apple pointed out that the primary advocate for the decision, and the entity set to benefit the most, is Spotify, a company headquartered in Stockholm, Sweden.
Apple noted that Spotify is the largest music streaming app globally and has engaged with the European Commission over 65 times throughout the investigation process. At a press conference, Vestager highlighted that millions of European music streaming users were left uninformed about all available options.
She also emphasized that Apple’s anti-steering rules resulted in consumers paying more for services due to the high commission fees imposed on developers, which were then passed on to consumers.
Spotify expressed satisfaction with the EU decision but noted that there are other concerns in different sectors. The company stated that while they appreciate the justice brought by this case, it does not address Apple’s problematic behavior towards developers beyond the realm of music streaming in various global markets.
Comments 1