Apple faces landmark $2 billion EU antitrust fine

London
CNN
—

The European Union has fined Apple 1.84 billion euros ($2 billion) for violating competition laws.

The coalition fined Apple (AAPL) on Monday for blocking rival music streaming services such as Spotify from telling iPhone users there was a cheaper way to subscribe externally, a first-ever monopoly on a U.S. tech giant. announced that it would impose penalties for violating the prohibition law. Apple’s app store.

Margrethe Vestager, the EU’s competition and digital chief, said Apple had “abused its dominant position” as a distributor of music streaming apps, giving European consumers “no where, no control”. “And they didn’t have a free choice about when to do it,” he added. How much does it cost to purchase a music streaming subscription? ”

“This is illegal and affects millions of European consumers,” Vestager told a news conference.

current apple The European Commission, the EU’s executive arm, said in a statement that app developers will be prohibited from fully informing users of iOS, the operating system on iPhones and iPads, about low-cost music subscriptions available outside of their apps. It was announced that For example, a developer cannot inform her iOS users about the price difference between an in-app subscription and a subscription available for the same streaming service on her website.

Apple also said the European Commission’s decision “fails to uncover any credible evidence of consumer harm and ignores the realities of a thriving, competitive and rapidly growing market.” This decision was reached regardless, he argued.

The company said in a statement that app developers are “competing on a level playing field” in Apple’s App Store. The company plans to appeal the fine.

The European Commission said it has added a lump sum of 1.8 billion euros ($1.95 billion) to the base fine to deter Apple and other big tech companies from violating antitrust laws.

“If you’re a dominant company and you do something illegal, you’re going to be punished,” Vestager said, adding that the basic fine alone is the equivalent of a “parking ticket” for Apple.

Vestager said the total fine of 1.84 billion euros is equivalent to 0.5% of Apple’s annual global sales.

The European Commission launched a formal antitrust investigation into Apple in 2020 after Spotify (SPOT) filed a complaint against Apple the previous year, alleging that it unfairly disadvantaged its competitors. .

Apple has required Swedish music streamers and other content providers to pay a 30% fee on purchases made through Apple’s in-app payment system, but its own service Apple Music must pay the fee. He said there was no such thing. Spotify also said that Apple prevented it from sharing information about subscription agreements with customers who use iPhones.

According to Spotify, Apple is “one of the largest sellers of smartphones” and its smartphone operating system is “the only way to bring our apps to everyone with an iPhone.”

The streamer said the EU’s decision to fine Apple sends a “strong message”. “No company, even a monopoly like Apple, can abuse its power to control how other companies interact with their customers,” the music streamer said in a statement.

Apple claimed in a statement that Spotify was the “largest beneficiary” of the EU fine. “Spotify has the world’s largest music streaming app and met with the European Commission over 65 times during this investigation.”

Spotify did not immediately respond to a request for comment on the claims.

In January, Apple announced changes to how it handles apps in the EU, including plans to allow third-party app stores on iPhones and iPads for the first time in its history, and a significant reduction in app store fees.

The changes were announced in anticipation of new EU rules that come into force this month as part of the Digital Markets Act, a comprehensive competition regulation for Big Tech.

Brian Fung contributed to this article.