Key Points:
- EU fines Apple €1.84 billion for App Store antitrust violations, citing competition and consumer choice restrictions.
- An investigation was initiated in response to Spotify’s complaint regarding the “Apple Tax” and restrictive App Store policies.
- Apple was accused of abusing its dominant position by preventing developers from promoting alternative subscription services outside the App Store.
- Critics argue Apple’s concessions are inadequate, calling for more substantial reforms to ensure fair competition.
European Union antitrust regulators have fined Apple €1.84 billion (approximately $2 billion) for violating App Store rules and restricting competition. The fine comes amidst ongoing scrutiny over Apple’s control of its platform and follows a complaint from Spotify regarding the so-called “Apple Tax” and restrictive App Store policies.
The EU Commission’s investigation found that Apple had abused its dominant position in the market by preventing music streaming app developers from informing iOS users about alternative and cheaper subscription services outside of the App Store. Margrethe Vestager, Executive Vice-President in charge of competition policy, stated that Apple’s actions were illegal under EU antitrust rules, leading to a hefty fine.
The investigation, initiated in 2020 after Spotify’s complaint, focused on App Store rules that hindered developers’ ability to communicate with customers and restricted their marketing efforts. Specifically, Apple’s anti-steering obligations were deemed to create unfair trading conditions, potentially resulting in higher user costs and limiting consumer choice.
Despite some concessions made by Apple, such as allowing developers to advertise external payment methods via email and link to their sites from within iOS apps, critics argue that these changes are insufficient. Spotify, in particular, criticized Apple’s rule changes as superficial and called for more substantial reforms.
The EU’s fine coincides with Apple’s preparations to comply with the Digital Markets Act (DMA), which will introduce third-party app marketplaces on the iPhone. However, developers remain skeptical of Apple’s approach, citing concerns over commission fees and restrictions on payment methods.
Spotify and other companies have objected to Apple’s DMA compliance, urging the EU to ensure fair competition and protect developers’ interests. Similar challenges have arisen in US courts, where Apple faced legal pressure to allow developers to link to other payment methods.
In addition to App Store policies, the European Commission has scrutinized Apple’s control over NFC technology on the iPhone. As a result of the investigation, Apple has offered concessions to allow third-party mobile wallets and payment providers to use the iPhone’s NFC feature for payments.
