The European Union has imposed a record fine of 1.8 billion euros ($2 billion) on Apple for abusing its dominant position in the music streaming market and harming millions of European consumers.
The EU’s executive arm, the European Commission, announced the penalty on Monday, following a five-year investigation triggered by a complaint from Spotify, Apple’s main rival in the music streaming sector.
The commission found that Apple violated the bloc’s competition laws by preventing app developers from informing iOS users about cheaper alternatives to Apple Music outside of the app. This meant that many users paid significantly higher prices for music streaming subscriptions, as Apple charged a 30% commission on all in-app purchases.
“This is illegal, and it has impacted millions of European consumers,” said Margrethe Vestager, the EU’s competition commissioner, at a news conference. “Apple behaved this way for almost a decade, which meant users were denied the benefits of effective competition in the very innovative and fast-moving market of music streaming.”
Apple rejected the commission’s decision and said it would appeal the fine. The company accused the commission of siding with Spotify, which it said holds a 56% share of Europe’s music streaming market and does not pay Apple for using its App Store.
“The decision was reached despite the Commission’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast,” Apple said in a statement. “Ironically, in the name of competition, today’s decision just cements the dominant position of a successful European company that is the digital music market’s runaway leader.”
The fine is the first antitrust penalty against Apple by the EU, which has been leading global efforts to rein in the power of Big Tech companies. The EU has also opened a separate investigation into Apple’s mobile payments service, and has introduced new rules to prevent tech giants from distorting digital markets.
The new rules, known as the Digital Markets Act, will take effect on Thursday and impose a set of do’s and don’ts on “gatekeeper” companies such as Apple, Meta, Google, and TikTok. The rules are designed to prevent the kind of behavior that Apple was found guilty of, such as restricting app developers from offering alternative payment systems or informing users about cheaper options.
Apple has already announced how it will comply with the new rules, including allowing iPhone users in Europe to use app stores other than its own and enabling developers to offer alternative payment systems. The company has also promised to open up its tap-and-go mobile payment system to rivals in order to resolve the other antitrust investigation.
