LONDON (AP) – The European Union on Monday handed Apple its first antitrust fine, banning rivals like Spotify from telling users how to pay for cheaper subscriptions externally. , fined the US tech giant nearly $2 billion for giving unfair preferential treatment to its music streaming service. iPhone app.
Apple has silenced streaming services from informing users of the payment options available through their websites. That would allow people to avoid the 30% fee charged when they pay through apps downloaded on the iOS App Store, the European Commission, the 27-nation bloc's enforcement agency and head of antitrust law, said. did. Enforcer.
“This is illegal and affects millions of European consumers who have been unable to make free choices about where, how and at what price they purchase their music streaming subscriptions. ,” EU Competition Commissioner Margrethe Vestager said at a press conference in Brussels.
Apple, which is contesting the decision, has been doing this for 10 years, resulting in “millions of people paying a few euros more per month than they originally had to pay for music streaming services.” “It became,” she said.
Associated Press correspondent Charles de Ledesma reports.
This is the culmination of a long, bitter battle between Apple and Spotify for music streaming supremacy. A complaint from the Swedish streaming service five years ago triggered an investigation that resulted in a 1.8 billion euro ($1.95 billion) fine.
The decision comes in the same week that new rules to prevent tech giants from cornering the digital market come into effect.
The EU is leading a global effort to crack down on Big Tech companies, including three fines totaling more than €8 billion against Google and Meta for distorting the online classified advertising market. and forcing Amazon to change its business practices.
The commission said Apple's fine is so large because it includes an additional one-time payment to deter Apple from repeating its violations or from similar violations by other technology companies.
This isn't the only penalty tech giants could face. Apple is still trying to resolve a separate EU antitrust investigation into its mobile payments service by promising to open up its tap-and-go mobile payments system to competitors.
Apple hit back at the commission and Spotify, saying it would appeal Monday's fine.
“This decision was reached despite the European Commission's failure to uncover any credible evidence of consumer harm and ignores the realities of a prosperous, competitive and rapidly growing market,” the company said in a statement. “I am doing so,” he said.
The report said Spotify stands to benefit from the EU move, with the Swedish streaming giant meeting more than 65 times with the commission during the investigation and accounting for 56% share of Europe's music streaming market. , claimed that it did not pay Apple any App Store usage fees.
“Ironically, today's decision, in the name of competition, only cements the dominant position of a successful European company that is the runaway leader in the digital music market,” Apple said.
Spotify did not address Apple's accusations, saying it welcomed the EU fine.
“This decision sends a powerful message: No company, even a monopoly like Apple, can abuse its power to control how other companies interact with their customers. “No,” Spotify said in a blog post.
The commission's investigation initially focused on two concerns. One was the iPhone maker's practice of forcing app developers who sell digital content to use an internal payment system that charges a 30% fee on all subscriptions.
These fees are a key part of Apple's services division, which generated $85 billion in revenue in the company's last fiscal year, which ended in September.
Various regulatory developments in the U.S. and Europe that threaten to reduce fees from Apple's App Store have weighed on the company's stock, which has fallen 9% so far this year, while tech-led The Nasdaq Composite Index is falling. Increased by 8%. Apple shares fell 2.5% in U.S. trading on Monday.
But the EU has since shifted its focus to how Apple can prevent app makers from telling users cheaper ways to pay for subscriptions outside of their apps.
According to the study, Apple may not allow streaming services to inform users of the cost of a subscription offer outside of the app, place a link within the app to pay for an alternative subscription, or even provide users with a different price. Prevented sending emails to inform configuration options.
“As a result, millions of European music streaming users were left in the dark about the full range of options available to them,” Vestager said, adding that the commission's investigation found that Spotify's premium service They do so because of the added constraints that found that just over 20% of consumers who would have signed up did not.
The fines come just before new EU rules come into force aimed at preventing technology companies from dominating digital markets.
The Digital Markets Act, scheduled to come into force on Thursday, imposes a series of “do's” and “don'ts” on “gatekeeper” companies such as Apple, Meta, Google parent Alphabet and TikTok parent ByteDance, leading to hefty fines. There is a risk of being fined.
The DMA's provisions are intended to prevent big technology companies from engaging in the kind of behavior at the center of the Apple investigation. Apple has already made clear how it will respond, including allowing iPhone users in Europe to use app stores other than its own and allowing developers to offer alternative payment systems.
Vestager warned that the committee will closely scrutinize how Apple complies with the new rules.
“Apple will need to open the gates to its ecosystem to make it easy for users to find the apps they want, pay for them how they want, and use them on the devices they want,” she said. .