The European Union leveled its first antitrust penalty against Apple on Tuesday, fining the U.S. tech giant nearly $2 billion for breaking the bloc’s competition laws by unfairly favoring its own music streaming service over rivals.
Apple banned app developers from “fully informing iOS users about alternative and cheaper music subscription services outside of the app,” said the European Commission, the 27-nation bloc’s executive arm and top antitrust enforcer. That is illegal under EU antitrust rules. Apple behaved this way for almost a decade, which meant many users paid “significantly higher prices for music streaming subscriptions,” the commission said.
The 1.8 billion-euro fine follows a long-running investigation triggered by a complaint from Swedish streaming service Spotify five years ago.
“Today’s decision marks an important moment in the fight for a more open internet for consumers,” Spotify said in a statement following the decision. “The European Commission has made its conclusion clear: Apple’s behaviour limiting communications to consumers is unlawful. This decision sends a powerful message — no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers.”
The EU has led global efforts to crack down on Big Tech companies, including a series of multbillion-dollar fines for Google and charging Meta with distorting the online classified ad market. The commission also has opened a separate antitrust investigation into Apple’s mobile payments service.
The commission’s investigation initially centered on two concerns. One was the iPhone maker’s practice of forcing app developers that are selling digital content to use its in-house payment system, which charges a 30% commission on all subscriptions.
But the EU later dropped that to focus on how Apple prevents app makers from telling their users about cheaper ways to pay for subscriptions that don’t involve going through an app.
The investigation found that Apple banned streaming services from telling users about how much subscription offers cost outside of their apps, including links in their apps to pay for alternative subscriptions or even emailing users to tell them about different pricing options.
On Monday, Spotify said Apple’s rules “muzzled” the company and other streaming services from communicating with customers about such benefits. It noted that its own DSP, Apple Music was not barred from what it could tell users. “By requiring Apple to stop its illegal conduct in the EU, the EC is putting consumers first,” the company said. “It is a basic concept of free markets—customers should know what options they have, and customers, not Apple, should decide what to buy, and where, when and how.”
The fine comes the same week that new EU rules are set to kick in that are aimed at preventing tech companies from dominating digital markets.
The Digital Markets Act, due to take effect Thursday, imposes a set of do’s and don’ts on “gatekeeper” companies including Apple, Meta, Google parent Alphabet, and TikTok parent ByteDance — under threat of hefty fines.
The DMA’s provisions are designed to prevent tech giants from the sort of behavior that’s at the heart of the Apple investigation. Apple has already revealed how it will comply, including allowing iPhone users in Europe to use app stores other than its own and enabling developers to offer alternative payment systems.
The commission also has opened a separate antitrust investigation into Apple’s mobile payments service, and the company has promised to open up its tap-and-go mobile payment system to rivals in order to resolve it.
