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The EU has levied a €1.8bn (£1.5bn) fine against Apple for making it difficult for European users to find out pricing information for alternative music streaming services such as Spotify and YouTube Music.
The tech giant has its own Apple Music service that it promotes heavily to iPhone users. But the European Commission (EC) found that it applied restrictions on app developers that prevented them from informing iOS users about alternative and cheaper music subscription services available outside of the app. This is illegal under EU antitrust rules.
An investigation found that Apple bans music streaming app developers from fully informing iOS users about alternative and cheaper music subscription services available outside of the app and from providing any instructions about how to subscribe to such offers.
If paid for via an app downloaded through the store, Apple takes 30% of all transactions for in-app purchases and 15% or 30% for subscriptions depending on various factors. This has forced many firms to raise subscription prices for users purchasing through the app itself, while offering cheaper plans on their own sites.
The decision from the EC concludes that Apple’s “anti-steering” efforts amount to unfair trading conditions that are designed to protect Apple’s commercial interests while negatively affecting iOS users.
The practice has been in place for almost 10 years and may have led many iOS users to pay significantly higher prices for music streaming subscriptions because of the high commission fee imposed by Apple.
In setting the level of the fine, the EC took into account “the duration and gravity of the infringement”, as well as Apple’s total turnover and market capitalisation. It also said that Apple submitted “incorrect information” during the investigation.
“The fine must be sufficient to deter Apple from repeating the present or a similar infringement; and to deter other companies of a similar size and with similar resources from committing the same or a similar infringement,” the EC said.
It also ordered Apple to remove the anti-steering provisions and to refrain from repeating the infringement in future.
Margrethe Vestager, executive vice president in charge of competition policy, said: “For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store.
“It 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 €1.8bn.”
In a statement, Apple said: “The decision was reached despite the EC’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive and growing fast.
“While we respect the EC, the facts simply don’t support this decision,” the company added.
Apple has long rested on a business model that relies on forcing iPhone users to acquire software solely through its own distribution channels. However, at some point this month users in the EU will be able to install alternative app stores on their devices due to recent rulings from the EC.
