Technology
Monday, March 4th, 2024 4:14 pm EDT
Key Points
- The European Commission fined Apple 1.8 billion euros for antitrust violations related to its dominance in distributing music streaming apps, marking the company’s first antitrust fine from Brussels and one of the largest imposed by the EU on a technology firm.
- Apple allegedly applied restrictions on app developers, preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the App Store, and banned developers from providing instructions on how users could subscribe to these cheaper offers, leading to potentially higher subscription prices for iOS users.
- EU antitrust chief Margrethe Vestager characterized the fine as relatively small compared to Apple’s scale, likening it to a “speeding ticket” relative to the company’s size, and ordered Apple to remove the anti-steering provisions and refrain from similar practices in the future, reflecting increased EU scrutiny on tech giants under the Digital Markets Act, which aims to clamp down on anti-competitive practices and force tech players to open their services to other competitors.
The European Commission levied a 1.8 billion euro ($1.95 billion) antitrust fine against Apple, the largest such penalty imposed by the EU on a technology company, for exploiting its dominant position in the market for distributing music streaming apps. The commission’s investigation, prompted by a complaint from Spotify in 2019, focused on Apple’s contractual restrictions on app developers, which prohibited them from informing iOS users about alternative and cheaper music subscription services outside of the App Store. Apple’s conduct, lasting almost a decade, potentially led iOS users to pay higher prices for music streaming subscriptions due to the commission fees imposed by Apple on developers. In response, Apple accused Spotify of being the primary beneficiary of the decision and defended its App Store ecosystem, emphasizing that Spotify pays nothing for its services and sells subscriptions through its website, bypassing Apple’s commission. The commission characterized the fine as relatively small compared to Apple’s scale, akin to a “speeding ticket” relative to the company’s size, and ordered Apple to remove the anti-steering provisions and refrain from similar practices in the future. This fine reflects escalating tensions between Big Tech and the EU as the commission increases scrutiny of tech firms, designating Apple as a “gatekeeper” under the Digital Markets Act. The act aims to address anti-competitive practices and force tech giants to open their services to competitors, leading Apple to announce plans to allow alternative app stores on its devices. EU antitrust chief Margrethe Vestager warned Apple to comply with the DMA regulations, which prohibit rules such as anti-steering obligations on the App Store, signaling a broader regulatory crackdown on tech giants by the EU.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/03/04/apple-hit-with-more-than-1point95-billion-eu-antitrust-fine-over-music-streaming.html
