Apple hit with more than $1.95 billion EU antitrust fine
On Monday, the European Commission fined Apple 1.8 billion euros ($1.95 billion) for using its power in the music streaming app distribution industry.
Highlights:
- EU fines Apple €1.8 billion for restricting app developers, inflating music subscription prices for iOS users.
- Apple's decade-long limits possibly raised subscription costs for users.
- Apple contends Spotify benefits most, alleging its success is partly due to Apple's tools, yet Spotify pays no fees, offering subscriptions outside the iOS app.
The commission discovered that Apple imposed limitations on app developers, preventing them from notifying iOS customers about alternative and cheaper music subscription services accessible outside of the app.
Apple also prohibited music streaming app developers from presenting directions on how to join those cheaper offers, consistent with the fee.
According to the commission, Apple's decisions lasted nearly ten years and "may have caused many iOS users into paying significantly higher prices for streaming music subscriptions because of the high commission fee charged by Apple on creators and passed on to customers in the form of higher cost of subscriptions for the same service on the Apple App Store."
Apple's response
In a heated response to the penalties, Apple stated that Spotify will benefit the most from the EU decision.
"Spotify, a firm located in Stockholm, Sweden, is the leading promoter for this decision—and the largest benefit. Spotify, the world's largest music streaming service, has met with the European Commission over 65 times during this inquiry," Apple claimed.
"At present, Spotify has a 56% share of Europe's music streaming market — over two times that of their closest competitors — and pays Apple zero for the services that have assisted to make them one of the most recognizable brands in the world."
According to Apple, a "large part" of Spotify's success comes from the Cupertino, California-based company's App Store, "along with every one of the software and tech that Spotify uses to develop, modify, and share their app with Apple users around all over the globe."
Apple claimed that Spotify pays it nothing. Spotify offers subscriptions through its website rather than the iOS app. Apple does not charge a commission for those sales.