Apple hit with €1.8bn fine for breaking EU law over music streaming

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Brussels has fined Apple more than €1.8bn for stifling competition from rival music streaming services, the first time the iPhone maker has been punished for breaching EU law.

Margrethe Vestager, the bloc’s competition chief, said the tech giant had broken EU antitrust rules for a decade by “restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem”.

She said this amounted to abuse of the group’s dominant position for music streaming on its App Store.

Apple replied that it would appeal against the decision, signalling years of legal fights in EU courts. The group’s shares were down about 2.5 per cent in morning trading.

The commission said it had gone beyond its standard fining procedure to provide a deterrent not just for Apple but for other “companies of a similar size and with similar resources”.

Vestager said that the “traditional part of the fine” — around €40mn — was “quite small, not even a speeding ticket, parking ticket”. As a result, the commission increased the total fine to €1.84bn, which Vestager said amounted to 0.5 per cent of Apple’s worldwide turnover.

The commission also said it had factored in the consideration that “Apple submitted incorrect information” during the process.

The FT reported last month the fine was expected to be in the region of €500mn. The commission subsequently made a decision to levy a higher penalty, according to three people familiar with the process.

The penalty is the third-biggest antitrust fine the commission has imposed.

In comparable decisions, Google has been fined roughly a total of €8bn over a decade for infringements of antitrust law although the search giant is contesting the penalties in court.

The tech giant responded that the commission had reached its decision despite failing to “uncover any credible evidence of consumer harm”, adding that Brussels’ reasoning “ignores the realities of a market that is thriving, competitive, and growing fast”.

The commission began its investigation into Apple in 2019 after music streaming app Spotify launched a complaint accusing the company of anti-competitive behaviour.

EU regulators found that Apple’s actions had resulted in users paying “significantly higher prices” for music streaming services.

The iPhone maker charges a 30 per cent fee for all sales through the App Store, a cost the commission said had been passed on to consumers in the form of higher subscription charges.

As part of Monday’s ruling, the commission also banned Apple from blocking apps from offering their services outside the iPhone maker’s iOS software.

Apple has never previously been fined for antitrust infringements by Brussels, but the company was hit in 2020 with a €1.1bn fine in France for alleged anti-competitive behaviour. The penalty was revised down to €372mn after an appeal.

The EU’s action will reignite the war between Brussels and Big Tech at a time when digital groups are being forced to show how they are complying with landmark new rules aimed at tackling the power of Silicon Valley behemoths.

Tech companies face a March 6 deadline to comply with the new Digital Markets Act. The law has already led Apple to propose a series of changes to its iOS software, such as allowing users to download apps from other sources and access alternative payment systems.