Apple has been fined 1.84 billion euros (about $2 billion) by European Union antitrust regulators over its App Store rules, and told it cannot stop music services from advertising Cheaper subscription deals outside the Apple store. The news of today's fine was previously reported by he Financial timesand comes ahead of Apple's major restructuring of iPhone app distribution rules due to the EU Digital Markets Act.
in a Monday press releaseThe EU Commission said its investigation found that “Apple prohibits developers of music streaming apps from fully informing iOS users about alternative, cheaper music subscription services available outside the app,” in addition to preventing that application providers share instructions on how to subscribe to such services. offers.
“For a decade, Apple abused its dominant position in the market for distributing streaming music applications through the App Store,” said Margrethe Vestager, executive vice president in charge of competition policy. “They did this by preventing developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem. “This is illegal under EU antitrust rules, which is why today we have fined Apple more than €1.8 billion.”
The Commission said it took into account the “duration and severity of the infringement” when setting the fine, as well as Apple's total turnover and market capitalization, while taking into account the “incorrect information” submitted by Apple. during the administrative procedure.
Apple has since issued a scathing response to the ruling, saying the Commission failed to “discover any credible evidence” of consumer harm or anticompetitive behavior. The company also says that Spotify wants to “rewrite the rules of the App Store” to gain competitive advantages, without paying anything to Apple, even though Apple claims that the App Store was crucial to Spotify's current market dominance. Apple says it will appeal the decision.
The EU investigation dates back to 2020 and was announced after Spotify filed an antitrust complaint over Apple's so-called “Apple Tax.” In addition to complaining about the 30 percent commission, Spotify took issue with App Store rules that it said restricted communications with its customers and limited its ability to market and promote deals.
Over time, the commission's investigation focused on App Store rules that prevent developers from informing their users about alternatives to Apple's payment options. In February 2023, the commission said its “preliminary opinion” was that Apple’s “anti-stewardship obligations” represent “unfair trading conditions” and argued that its App Store policies were “neither necessary nor proportionate,” could making users pay more and limited consumer choice.
Apple has already made some concessions. In 2021, he said developers could announce payment methods outside of the iOS app through communications such as email. Then, in early 2022, it began allowing developers to link to their own sites from the iOS apps themselves. But this second change only applied to so-called “reading apps” for services like Netflix, Kindle or Spotify, which are primarily designed to provide access to digital content, and developers had to request an “entitlement” before they could add a link. external. . Bloombergwhich previously reported on the EU antitrust fine, said Spotify criticized Apple's rule changes as being “just for show.”
The EU fine comes as Apple prepares to revise its app distribution rules in the EU to comply with the March 7 Digital Markets Act (DMA), allowing third-party app marketplaces on the iPhone for the first time. . But app developers have criticized Apple's approach, which includes charging a commission of up to 17 percent to developers who use their own payment method or link to their own website, plus an annual fee of 0.50 euros per app installation after the first million. Spotify said The changes are “an unviable alternative that will suffocate (developers') businesses immediately.”
On March 1, Spotify also posted an open letter supported by 33 other companies and associations who highlighted their concerns with Apple's DMA compliance. In the letter, Spotify stated that the EU's response to the proposal “will serve as a litmus test of the DMA and whether it can deliver for Europe's citizens and economy.”
Meanwhile, US courts have also ruled that Apple must allow developers to link to other payment methods as a result of a legal challenge from fortnite developer Epic Games. But when Apple began allowing developers to connect, it maintained that it would still take a cut of up to 27 percent of any digital purchases, a small reduction over its typical rate of 30 percent. Apple critics criticized the changes, with Spotify saying they showed that Apple “will stop at nothing to protect the profits they make at the expense of developers and consumers under their app store monopoly.”
In addition to its investigation into Apple's App Store policies, the European Commission has also been looking into Apple's policy of restricting iPhone NFC (near field communication) to its own wallet and payment services. As a result of the investigation, Apple has offered to allow third-party payment providers and mobile wallets to use the iPhone's NFC feature to make payments.
Update March 4 at 8:00 am ET: Added Apple's answer.