App Store Rules: EU Hits Apple With Nearly $2 Billion Fine (Photo by Laurenz Heymann on Unsplash)
The European Commission has fined tech giant Apple €1.84 billion ($1.95 billion) over its App Store policies. The European Union (EU) regulators said that they imposed the fine on Apple for “abusing” its dominant position on the market for the distribution of music streaming apps to iPhone users through its App Store.
The European Commission, the politically independent executive arm of the EU, said in its statement that they found that the iPhone maker applied restrictions on app developers, preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the app. The European Commission noted that Apple”s action is illegal under EU antitrust rules. For example, the anti-steering provisions ban app developers from informing iOS users within their apps about the price differences between in-app subscriptions sold through Apple”s in-app purchase mechanism and those available elsewhere.
“Today”s decision concludes that Apple”s anti-steering provisions amount to unfair trading conditions, in breach of Article 102(a) of the Treaty on the Functioning of the European Union (‘TFEU”),” said the Commission in its statement. The regulator also added that the fine was set on the basis of the Commission”s 2006 Guidelines on fines.
The Commission also added that Apple”s conduct may have led many iOS users to pay “significantly higher prices” for music streaming subscriptions because of the high commission fee charged by Apple on developers and passed on to consumers in the form of higher subscription prices for the same service on the App Store. The European Commission initiated a formal antitrust investigation into Apple in June 2020.
At the same time, Apple has responded to the European Commission’s decision and said that the “decision was reached despite the Commission’s failure to uncover any credible evidence of consumer harm.” Apple also mentioned that the primary advocate for this decision and the biggest beneficiary is Spotify. Apple also added that the music streaming service has met with the European Commission “more than 65 times” during this investigation.
