European Commission Set to Fine Apple Over Alleged Anti-Competitive Practices

The European Commission is poised to levy a fine against Apple amounting to approximately 500 million euros ($539 million) for purported breaches of EU competition law, as per the Financial Times, which cited anonymous sources familiar with the situation.

Brussels initiated an inquiry into allegations that Apple obstructed third-party music services on its devices and favored its own Apple Music service following a formal complaint filed by Spotify to regulators in 2019.

In many territories, Apple’s App Store regulations bar companies like Spotify from directly billing users for subscriptions within the app, mandating the use of Apple’s App Store billing service instead, which incurs a commission of up to 30%.

The European Commission formally accused Apple in an antitrust investigation in 2021 but narrowed the focus of the probe last year, dropping a charge related to compelling developers to use its proprietary in-app payment system.

The latest iteration of the investigation scrutinized whether Apple had impeded apps from informing users about cheaper subscription alternatives outside of its native App Store, potentially breaching EU competition laws.

Investigation focuses on Apple's App Store rules and alleged favoritism
The investigation focuses on Apple’s App Store rules and alleged favoritism towards Apple Music, sparking antitrust concerns.

Sources informed the FT that the findings of the investigation would lead to the Commission accusing Apple of exploiting its dominant position and prohibiting its “unfair trading conditions” regarding its music service subscription policies.

If imposed, this fine would rank among the most significant financial penalties the EU has levied against a major technology company. It follows a series of substantial contested fines against Google.

While Apple has previously faced fines for antitrust violations — such as the €1.1 billion penalty in France, later reduced to €372 million on appeal — this would mark its inaugural fine from Brussels.

The reported fine is part of a broader crackdown within the EU and precedes the implementation of the bloc’s landmark Digital Markets Act slated for March.

This new legislation seeks to tackle anti-competitive practices from tech giants categorized as “gatekeepers,” including Apple, Amazon, and Google.

Smaller internet firms and other tech entities, like Spotify, have long decried being unfairly constrained by the business practices of these tech behemoths.

In Apple’s case, the Digital Markets Act will mandate the company to permit third-party developers to distribute apps outside the iOS Store and enable those apps to directly bill their customers.

Fine marks a significant crackdown on big tech by the EU
Fine marks a significant crackdown on big tech by the EU ahead of the Digital Markets Act enactment, impacting Apple’s business practices.

Apple has taken steps to comply with EU regulations by announcing alterations to its iOS, Safari, and the App Store in the EU. Additionally, it declared that it would soon allow software developers to distribute their apps to Apple devices through alternative stores.

In a separate antitrust investigation, the European Commission is examining how Apple restricts competitors’ access to its Apple Pay mobile system. Apple has already made concessions concerning this case.

The timing of the Commission’s announcement regarding the fines remains undetermined, but it will not alter the course of the antitrust investigation, according to the FT report.

Apple retains the right to contest the decision in EU courts. The tech giant declined to comment on the report, referring CNBC to a previous statement expressing satisfaction that regulators narrowed the focus of the probe.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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