Apple Set to Face Over $500 Million Fine After EU Finds It Broke Rules to Silence Spotify, Other Rivals

EU found that Apple broke rules in thwarting rival music services from informing users that cheaper alternatives existed outside of its App Store.

By Samuel Stolton, Bloomberg | Updated: 19 February 2024 18:05 IST

Apple Set to Face Over $500 Million Fine After EU Finds It Broke Rules to Silence Spotify, Other Rivals

Photo Credit: Bloomberg

The EU’s investigation into Apple’s App Store was sparked by a complaint nearly four years ago

Highlights

The penalty is Apple’s first ever from the EU bloc
EU also ordered Apple to repay €13 billion in allegedly unfair tax breaks
Apple has also faced pressure from individual EU member states

Apple will face a European Union fine close to EUR 500 million ($539 million or roughly Rs. 4,475 crore) over the regulator's investigation into allegations it silenced music-streaming rivals, including Spotify Technology SA, on its platforms.

The penalty — Apple's first ever from the bloc — will be set after the EU watchdog found that it fell foul of competition rules in thwarting rival music services from informing users that cheaper alternatives existed outside of its App Store, according to people familiar with the matter.

Apple, when contacted for comment, referred to a previous statement, which said that the “App Store has helped Spotify become the top music streaming service across Europe.” The European Commission declined to comment. The Financial Times reported the fine earlier.

Spotify Will Allow In-App Purchases in Europe via iPhone in March

EU competition chief Margrethe Vestager has made it a core strategy to attempt to dismantle Big Tech's dominance in the bloc through fines and regulatory actions. She's slapped Alphabet's Google with penalties of more than EUR 8 billion (roughly Rs. 71,577 crore) and also ordered Apple to repay EUR 13 billion (roughly Rs. 1,16,325 crore) in allegedly unfair tax breaks from Ireland.

Apple has also faced pressure from individual EU member states. It was fined EUR 1.1 billion (roughly Rs. 9,842 crore) in France in 2020 for anti-competitive behavior, although the total was later reduced to EUR 372 million (roughly Rs. 3,328 crore) after an appeal.

The EU's investigation into Apple's App Store was sparked by a complaint nearly four years ago from Spotify, which claimed it was forced to ramp up the price of its monthly subscriptions to cover costs associated with Apple's alleged stranglehold on how the App Store operates.

Apple, Meta, Other Tech Giants Brace for Rollout of EU’s Digital Services Act

In a closed-door meeting between EU officials and Apple in June last year, the tech firm told regulators it had already addressed any possible competition concerns arising from Spotify's complaint.

In a separate probe, Apple is set to have its settlement proposal in the EU's investigation into its tap-and-pay tech accepted, according to people familiar with the matter.

The commission is poised to accept a 10-year offer from Apple to open up access to its coveted near-field communication chip on iPhones to rival digital wallets, after a market test received largely positive feedback, the people, who asked not to be identified because the matter is private, said.

Apple's move to settle the case came after the EU watchdog earlier raised formal concerns that the company had restricted access to the technology, amounting to an alleged abuse of its market power.

Vestager is now readying for enforcement of the bloc's flagship Digital Markets Act — set to come into play on March 7. The sweeping new rules are intended to head off competition violations by tech firms before they take root.

Under the DMA, it will be illegal for the most powerful firms to favor their own services over those of rivals. They'll be barred from combining personal data across their different services, prohibited from using data they collect from third-party merchants to compete against them, and will have to allow users to download apps from rivals platforms.

Apple unveiled its first mixed reality headset, the Apple Vision Pro, at its annual developer conference, along with new Mac models and upcoming software updates. We discuss all the most important announcements made by the company at WWDC 2023 on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.