Apple was fined 1.8 billion euros ($1.95 billion) by E.U. regulators for hindering competition among music streaming rivals. The penalty is a result of a five-year investigation initiated by Spotify. Regulators accused Apple of using its App Store dominance to exclude rivals.
“For a decade, Apple abused its dominant position in the market for music streaming apps through the App Store,” said Margrethe Vestager, the E.U. executive vice president overseeing competition policy.
“From now on,” she announced, “Apple must allow music streaming developers to freely communicate with their users.” The significant fine reflects both Apple’s financial power and the harm inflicted on millions of European users.
The E.U. charged Apple due to its App Store regulations that require apps to use its payment service, taking up to a 30 percent commission. Regulators in the Netherlands and South Korea have challenged Apple to allow alternative payment services, but Apple is contesting their decisions.
Apple plans to appeal the ruling, stating that the facts do not support the decision. Apple has argued that Spotify users can subscribe through other means, pointing out Spotify’s outside app subscribers in recent years.
Spotify responded to the penalty, saying it sends a message that companies cannot abuse power. The E.U. has been stringent in regulating the tech sector, investigating or fining companies like Google, Amazon, Microsoft, and Meta.
Apple’s latest financial report shows significant revenue and profit numbers. The E.U. has implemented laws requiring Apple to open the iPhone to competing app stores, with the rules set to take effect soon.
Apple will offer developers three options to comply with new laws, including reducing commissions and allowing alternative payments. However, developers argue that Apple’s proposal does not align with the law’s intent.
Spotify has criticized Apple for years, citing disadvantages due to App Store fees. Spotify’s efforts to diversify services have been hindered by app store regulations.
Daniel Ek, Spotify’s CEO, has expressed frustration with the slow E.U. investigation process. He believes that without policymakers’ intervention, nothing will change.