Apple Slapped with $2 Billion Fine by EU Over Anticompetitive Music Streaming Practices

In a landmark decision, the European Union has imposed a hefty $2 billion fine on tech giant Apple for unfairly favoring its own music streaming service over competitors like Spotify.

The Associated Press reports that the European Commission, the executive arm of the EU responsible for antitrust enforcement, has delivered a significant blow to Apple’s dominance in the music streaming market. After a five-year investigation sparked by a complaint from Spotify, the commission found that Apple had engaged in anticompetitive practices that stifled competition and limited consumer choice.

Apple’s restrictive policies regarding in-app purchases and subscription models were the key focus of the issue. The commission’s investigation revealed that Apple had forbidden rival music streaming services from informing users about alternative payment options available through their websites, which would allow them to bypass Apple’s 30 percent commission on in-app purchases.

During a news conference in Brussels, Margrethe Vestager, the EU’s competition commissioner, commented: “This is illegal. And it has impacted millions of European consumers who were not able to make a free choice as to where, how and at what price to buy music streaming subscriptions.”

The commission’s findings claim that Apple had maintained these anti-competitive practices for a decade, resulting in consumers paying higher subscription fees than they otherwise would have. Vestager emphasized that the fine, which includes a substantial deterrent component, aims to prevent Apple and other tech companies from engaging in similar offenses in the future.

Apple has vehemently denied the allegations and plans to appeal the decision, arguing that the commission failed to uncover credible evidence of consumer harm. The company further claimed that the decision cements the dominant position of Spotify, which holds a 56 percent share of Europe’s music streaming market and does not pay Apple for using its App Store.

However, Spotify welcomed the EU’s decision, stating that it sends a powerful message that no company, not even a tech giant like Apple, can wield power abusively to control how other companies interact with their customers.

The fine comes at a pivotal moment as new EU rules, the Digital Markets Act, are set to take effect this week. These regulations aim to prevent tech giants from cornering digital markets and engaging in anticompetitive practices. Apple has already outlined its plans to comply with the new rules, including allowing iPhone users in Europe to use alternative app stores and enabling developers to offer alternative payment systems.

Vestager warned that the commission would be closely monitoring Apple’s compliance with the new rules, emphasizing that the company will have to “open its gates to its ecosystem” and allow users to easily find apps, pay for them in any way they choose, and use them on any device.

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