Apple Slapped with Record $1.95 Billion Antitrust Fine by EU for Music App Dominance

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Apple Slapped with Record $1.95 Billion Antitrust Fine by EU for Music App Dominance

Team Finance Saathi

04/Mar/2024

Learn about the European Commission's historic 1.8 billion euro fine against Apple for antitrust violations related to music streaming apps, marking a significant clash between the tech giant and regulators.

The European Commission has imposed a landmark 1.8 billion euro ($1.95 billion) fine on Apple for breaching antitrust regulations in the distribution of music streaming apps. The Commission found that Apple had abused its dominant position by imposing restrictions on app developers, preventing them from informing iOS users about alternative and cheaper music subscription services outside of the App Store. This marks Apple's first antitrust fine from Brussels and is one of the largest ever levied against a technology company by the EU.

The investigation into Apple's conduct was triggered by a complaint from Spotify in 2019. The Commission focused on contractual restrictions that hindered app developers from informing iPhone and iPad users about alternative music subscription services available at lower prices outside of the App Store. Apple's actions, which lasted nearly a decade, may have led iOS users to pay significantly higher prices for music streaming subscriptions due to the commission fee imposed by Apple on developers.

In response to the fine, Apple launched a spirited defense, arguing that Spotify stands to benefit the most from the EU's decision. Apple highlighted Spotify's dominant position in Europe's music streaming market and emphasized that Spotify pays nothing to Apple for its services. Instead of selling subscriptions through their iOS app, Spotify directs users to their website, bypassing Apple's commission on in-app purchases.

The fine is expected to escalate tensions between tech giants and European regulators, particularly as the EU increases scrutiny of these firms. Apple, along with other tech companies like Microsoft and Meta, has been designated as "gatekeepers" under the Digital Markets Act, a regulation aimed at curbing anti-competitive practices in the tech industry. These laws have prompted Apple to announce plans to open its iPhone and iPad to alternative app stores, responding to long-standing complaints from developers about Apple's commission fees on in-app purchases.

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Apple Slapped with Record $1.95 Billion Antitrust Fine by EU for Music App Dominance

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