Apple faces a €500m (£427m) fine for interfering with competitors in the music streaming market.
The Financial Times reported that the European Commission, the EU’s executive arm, will hand down punishment after a lengthy investigation.
Why is Apple facing the prospect of fines?
Following complaints by Spotify in 2019, the EU has been investigating Apple’s position in the music streaming app market. The study was scaled back to focus on specific restrictions Apple has placed on app developers. These restrictions prevent developers like Spotify from telling iPhone and iPad users about cheaper music subscriptions available outside of the App Store. Spotify claims this will benefit the tech company’s rival app, Apple Music.
The case is the latest example of a legal dispute over Apple’s app store, a key digital gateway and source of complaints from the companies that use it.
Spotify has long criticized Apple’s app store rules, including charging a 30% fee on apps and in-app purchases. Apple recently responded to some of these concerns by announcing, under pressure from the EU’s Digital Markets Act (DMA), that it would allow EU customers to download apps without going through its own store.
What does the EU think about Apple’s actions?
The EU declined to comment. However, when Apple issued a new statement of objection in February last year, it indicated that it intended to punish the company, making it a formal step for the city of Brussels to express its concerns about the company’s actions. The Commission considers the restrictions to be “unfair trading conditions” in violation of Article 102 of the Treaty on the Functioning of the European Union, or, more simply, an abuse of a dominant position in a particular market. said.
The commission said it was concerned that the restrictions would prevent developers from “informing consumers about where and how they can subscribe to streaming services at affordable prices.”
What happens next?
The FT reported that the commission would announce the fine early next month. The maximum fine that can be imposed on a company for anti-competitive behavior is limited to his 10% of global turnover. In Apple’s case, this suggests a potential fine of $30bn (£24bn), although the FT says the final amount will be significantly lower. Apple may also appeal the Commission’s decision.
What are Apple and Spotify saying?
Both men declined to comment on Monday. Last year, Apple said its store helped Spotify become Europe’s top music streaming service and hoped the commission would “stop pursuing meritless complaints.” According to the FT, that seems unlikely.
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Spotify, for its part, said its complaint against Apple was about creating a “level playing field.” The company claims that app store restrictions favor Apple Music, Apple’s own streaming service.
What do the experts say?
Ann Witt, a professor of antitrust law at France’s EDHEC Business School, said Apple already faces a tough regulatory environment with the introduction of the DMA, which targets major digital “gatekeepers” such as Apple. . In fact, Apple opened its app store to competition thanks to that law. Witt said that if Apple is punished after the Spotify charges, it will show that the European Commission does not expect the DMA to overshadow the EU’s competition procedures.
“From the beginning, the committee has emphasized that the DMA is a complement to the Competition Rules, not a replacement for them,” Witt said. “This decision is probably aimed at confirming this commitment. Whether it works in the long run is another question, as DMA should be a more effective (but less sensitive) tool.” is.”
The Open Market Institute, which researches the effects of corporate monopolies, said the size of the reported fine will not have a negative impact on Apple.
“That’s far too little to give Apple any meaningful incentive to follow the rules,” said OMI’s Max von Thun. “Half a billion is about half a day’s worth of revenue for the company.” European director.
