The European Commission (EC) has imposed a hefty fine of €1.8 billion on Apple for misusing its dominant position in the market for music streaming app distribution to iOS and iPadOS users through the App Store. The Commission found that Apple imposed restrictions on app developers, preventing them from informing iOS users about alternative and cheaper music subscription services outside of the app, known as ‘anti-steering provisions’. According to the EC, these actions violate EU antitrust regulations.
After investigating the matter, the EC discovered that Apple prohibits music streaming app developers from fully informing iOS users about alternative and more affordable music subscription services available outside the app. Additionally, app developers are not allowed to provide instructions on how to subscribe to such services, as stated in the official press release.
Essentially, iOS users have the option to subscribe to third-party music streaming services through the App Store or directly through the service’s website. Opting for the latter is cost-effective because Apple does not receive a portion of the fee as it does through the App Store route. However, Apple prohibits advertising of this price disparity, likely due to financial motivations.
Apple’s anti-steering provisions not only prevent app developers from including links in their apps leading users to their websites for subscription but also restrict them from reaching out to new users via email to inform them about alternative pricing options after creating an account.
The EC’s decision concludes that these provisions create “unfair trading conditions,” which are unnecessary and disproportionate for the protection of Apple’s commercial interests. This behavior negatively impacts iOS users, depriving them of the ability to make informed decisions about purchasing music streaming subscriptions.
Apple’s actions may have led many iOS users to pay higher prices for music streaming subscriptions due to the commission fees imposed on developers. Additionally, the EC emphasizes that Apple’s conduct resulted in non-monetary harm by degrading the user experience.
The fine of €1.8 billion aims to serve as a deterrent for Apple and other companies of similar size to prevent similar infringements in the future. The EC has instructed Apple to eliminate the anti-steering provisions and refrain from engaging in similar practices moving forward.
Apple has announced its intention to appeal the decision and released a press release expressing strong sentiments towards Spotify, labeling it as the primary advocate for the EC’s ruling. Apple claims that Spotify holds more than a 50% market share in Europe and does not pay Apple for utilizing the App Store. Spotify’s decision not to sell subscriptions through the App Store allows it to avoid the ‘Apple tax’.
Apple accuses Spotify of wanting to manipulate rules in its favor by embedding subscription prices within its app without using the App Store’s In-App Purchase system. Apple asserts that Spotify benefits from Apple’s tools and technologies without paying for them, leveraging the trust Apple has established with users.
In a resentful conclusion, Apple criticizes the EC’s decision, stating that it reinforces the dominant position of a successful European company in the digital music market.
