Tech giant, Apple, has been penalised more than $1.84B (£1.5bn) by the European Commission for abusing its market dominance in the distribution of music streaming apps to owners of iPhones and iPads (referred to as “iOS users”) via the App Store.
The EU’s executive arm in a press release on Monday enforced the penalty after determining that the iPhone manufacturer had violated competition laws by placing restrictions on app developers.
The fine focuses on Apple’s implementation of anti-steering regulations, which limit the capacity of music streaming applications to inform users about less expensive deals available outside of Apple’s App Store.
The iPhone manufacturer offers its own music streaming service, Apple Music, and competitors, like Spotify, claim the limitations make them less competitive with the platform operator.
Spotify and other app developers have long been against Apple’s App Store, claiming that it discourages competition by imposing fees (such as a thirty per cent tax) on apps and in-app purchases.
Nevertheless, in response to the adoption of the EU’s Digital Markets Act (DMA), which was implemented to regulate large tech companies like Apple, Microsoft, and Mark Zuckerberg’s Meta, Apple has declared that it will permit EU customers to download apps onto iPhones from sources other than the App Store.
“Apple’s rules ended up in harming consumers,” said the EU’s competition chief, Margrethe Vestager, speaking during a Commission press conference to announce the decision.
“Critical information was withheld so that consumers could not effectively use or make informed choices.
“Some consumers may have paid more because they were unaware that they could pay less if they subscribed outside of app. And other consumers may not have managed at all to subscribe to their preferred music streaming provider because they simply couldn’t find it.”
The DMA, which was implemented last year, aims to eliminate the tech companies’ gatekeeping authority and increase competition in those of the sectors they have been most protective of, such as Apple Wallet and Google Pay.
The fine comes after Spotify filed an antitrust lawsuit in March 2019 against Apple, alleging that the iPhone maker intentionally disadvantages other app developers by acting as both “a player and referee,” and that Apple’s App Store policies “purposely limit choice and stifle innovation at the expense of the user experience.”
