EU to slap Apple with €500m fine over Spotify antitrust, report
Spotify complained that Apple's control over the App Store forced the company to raise its monthly subscription prices
EU regulators are set to deliver a financial blow to tech giant Apple, slapping it with a hefty fine for alleged violations of EU antitrust laws regarding access to its music streaming services.
According to the Financial Times, the regulators have concluded their investigation into Spotify's allegations against Apple's App Store policies and are expected to impose a penalty around €500 million ($539 million) that will be officially announced in the coming month.
The investigation into Apple's practices stems from a complaint filed in 2019 by Spotify Technology SA, a major player in the music streaming industry.
Spotify's complaint revolves around Apple's restrictive App Store policies, which allegedly inhibited competition by preventing iPhone apps from informing users about cheaper alternatives to Apple's own music streaming service.
Spotify complained that Apple's control over the App Store forced the company to raise its monthly subscription prices to offset the costs associated with adhering to Apple's rules.
While the EU initially examined a range of objections raised by Spotify, including allegations of unfair competition against Apple Music, the focus eventually narrowed to Apple's refusal to allow developers to link to external subscription sign-up pages within their apps.
In a formal charge sheet issued in February 2023, the European Commission criticised Apple's "anti-steering rules" as unnecessary and claimed they resulted in higher prices for consumers.
Apple made concessions in response, revising its policies in 2022 to permit music services like Spotify to direct users to web-based subscription sign-ups, thereby bypassing Apple's revenue cut. But Spotify characterised Apple's changes as superficial, asserting that they did little to address the underlying issues.
The fine will be the EU's first against Apple. While €500 million may seem substantial, it pales in comparison to the staggering $40 billion penalty initially considered by EU regulators, equivalent to 10% of Apple's annual global turnover.
Notably, Apple faced a similar antitrust fine in 2020, with French authorities initially levying over $1 billion before reducing it to approximately $366 million following an appeal from the company.
In response to inquiries regarding the impending fine, Apple representative Emma Wilson referred reporters to previous statements made by another company spokesperson, Hannah Smith.
Smith reiterated Apple's stance that the European Commission's pursuit of the case lacks merit and expressed hope that the matter would be resolved favourably for the company.
In addition to addressing past violations, the European Commission has been proactive in implementing new regulations aimed at preventing future anticompetitive behaviour by tech firms.
The Digital Markets Act (DMA), set to come into full force in March 2024, outlines a set of guidelines and restrictions designed to promote fair competition in the digital marketplace.
Under the DMA, powerful companies like Apple and Google will be prohibited from favouring their own services over those of competitors, marking a significant shift in how tech giants operate within the EU market.