The European Commission has fined Apple €1.8 billion, or approximately $1.95 million, for allegedly abusing its market dominance in music streaming app distribution to prevent developers from promoting cheaper services outside the app.
“The European Commission has fined Apple over €1.8 billion for abusing its dominant position on the market for the distribution of music streaming apps to iPhone and iPad users (‘iOS users’) through its App Store.” reads a statement from the European Commission.
“In particular, the Commission found that Apple applied restrictions on app developers preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the app (‘anti-steering provisions’). This is illegal under EU antitrust rules.”
The Commission’s investigation began after Spotify and an e-book/audiobook distributor issued complaints regarding two Apple App Store policies—charging a 30% commission fee on all subscription fees through Apple’s in-app purchase system (IAP) and preventing developers from promoting cheaper membership options outside the app.
The Commission says this has led content developers and subscription services to increase membership prices with Apple Apps to make up for the 30% commission.
“Market dominance is, as such, not illegal under EU antitrust rules. However, dominant companies have a special responsibility not to abuse their powerful market position by restricting competition, either in the market where they are dominant or in separate markets – The European Commission.
However, Apple says they believe the European commission has not found any evidence of consumer harm or proof of anti-competitive behavior.
Apple instead says the primary benefactor of this decision is Spotify, which chose not to promote in-app subscriptions, even though it was involved in the initial complaints.
“The primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden. Spotify has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation.
Today, Spotify has a 56 percent share of Europe’s music streaming market — more than double their closest competitor’s — and pays Apple nothing for the services that have helped make them one of the most recognizable brands in the world. A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world.” – Apple.
Apple says that while they respect the Commission’s decision, they will be appealing the fine.