EC fines Apple £1.5 billion over App Store rules

Antitrust fine four times bigger than expected

The European Commission fined Apple €1.84 billion (roughly £1.5 billion, or $1.95 billion) for violating EU antitrust rules by abusing its dominant position in the app store market.

The fine is almost four times the anticipated penalty of €500 million, a sign that the EC means business when it comes to penalising transgressions of its competition regulations. However, it is still a tiny amount compared with the $40 billion penalty initially considered by EU regulators, equivalent to 10% of Apple's annual global turnover.

"For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store," said Margrethe Vestager, executive vice-president in charge of competition policy at the Commission.

"They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem. This is illegal under EU antitrust rules, so today we have fined Apple over €1.8 billion."

The decision which resulted in Apple's first fine from the EU was triggered by a 2019 complaint by Spotify, which claimed Apple restricted developers from informing users about alternative, cheaper subscription options to Apple's own music streaming services. App owners have to pay Apple up to 30% for in-app purchases.

The Commission's investigation upheld Spotify's complaint, finding that Apple prevents iOS app developers from sharing information about external payment options, external links and price differences. This amounts to unfair trading conditions that violated EU treaty rules.

"Apple's anti-steering provisions amount to unfair trading conditions, in breach of Article 102(a) of the Treaty on the Functioning of the European Union (‘TFEU')," the EC said.

"These anti-steering provisions are neither necessary nor proportionate for the protection of Apple's commercial interests in relation to the App Store."

Apple denied the allegations, and said it planned to appeal.

"The decision was reached despite the Commission's failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast," the company said in a statement. "The primary advocate for this decision, and the biggest beneficiary, is Spotify."

The massive fine comes as the EU's new Digital Markets Act (DMA) aims to increase competition in the tech sector and reduce the market dominance of companies such as Apple, Microsoft and Google.