Apple hit with record-breaking EU fine over music streaming monopoly

New York: On Monday, the EU imposed a 1.8 billion euro fine on Apple for breaching the bloc’s regulations. This was due to Apple’s actions of restricting music streaming services from notifying users about subscription options beyond its own App Store. Immediately following the announcement, Apple declared its intention to appeal the inaugural antitrust fine levied against it by Brussels. The case originated from a complaint by Spotify, a prominent Swedish music streaming company.According to the European Commission, Apple imposed limitations on app developers, barring them from informing iOS users about alternative and more affordable music subscription services accessible outside of the app. The EU’s formidable antitrust regulator deemed this practice unlawful under EU antitrust regulations.

“The duration of Apple’s behavior, spanning nearly a decade, likely resulted in numerous iOS users paying inflated prices for music streaming subscriptions due to the substantial commission fees charged by Apple to developers, ultimately passed on to consumers,” the statement noted.

Spotify’s grievance in 2019 prompted a thorough investigation by the commission into the practices of the iPhone maker in 2021. However, Brussels narrowed its scrutiny last year, concentrating specifically on Apple’s efforts to restrict apps from informing users about competing music subscription alternatives.

Commission Vice President Margrethe Vestager stated, “Apple has exploited its dominant market position in the distribution of music streaming apps via the App Store for over a decade.” She emphasized, “We have instructed Apple to eliminate the relevant provisions and to abstain from similar practices going forward.”

In response, Apple criticized the commission’s ruling and announced its intention to challenge it. “The decision was made despite the Commission’s inability to uncover any credible evidence of harm to consumers, and disregards the dynamics of a market that is flourishing, competitive, and rapidly expanding,” Apple asserted in a statement.

Sour Apple

Critics argue that despite the magnitude of the fine, it pales in comparison to Apple’s immense profits. In the final quarter of 2023 alone, Apple recorded profits of $33.92 billion.

Brussels has previously imposed fines totaling around eight billion euros on Google over the past years, although the American company is contesting these fines in EU courts.

However, the EU anticipates that the fine will prompt Apple to cease its restrictions on access to rival streaming services, particularly given that it will be compelled to do so under the Digital Markets Act, a new law it must comply with by March 7.

Alphabet, Amazon, ByteDance (TikTok’s parent company), Meta (formerly Facebook), and Microsoft are also required to adhere to the Digital Markets Act (DMA).

Under the DMA, the commission is authorized to impose fines of up to 10 percent of global revenue for any infractions, or 20 percent for repeat offenders.

Apple disputes Spotify’s allegations and highlights the streaming giant’s significant market share in the online music industry.

According to Spotify’s recent figures released last month, the platform boasts over 600 million monthly users, with a third of them being paying subscribers.