Europe’s antitrust watchdog has levied a record penalty of 1.8 billion euros against Apple, accusing the tech giant of abusing its dominant position in the digital music distribution market to the detriment of rivals like Spotify. The European Commission contends that Apple placed restrictions on app developers that prevented them from informing iPhone and iPad users about cheaper and alternative music subscription services available outside the App Store ecosystem.
“For nearly a decade, Apple used its control of the music streaming distribution space on iOS to block developers from telling consumers about lower-cost music options available outside the Apple environment. This behavior violates EU antitrust rules, and that is why Apple is being fined more than 1.8 billion euros,” announced Margrethe Vestager, the EU competition chief.
The conduct, extending over almost ten years, may have pushed iOS users toward higher prices for music streaming subscriptions because Apple’s 30 percent commission on app developers is effectively passed on to consumers. Vestager noted that millions of European consumers could not freely decide where, how, or at what price to purchase streaming music subscriptions due to this policy. The outcome, she argued, deprived users of genuine choice in a competitive market.
Essential information
According to the European Commission, Apple’s rules prevented iPhone and iPad users from learning about music subscription offers available on the open internet outside of the App Store. The developers could not disclose price differences between in‑app subscriptions sold through Apple’s purchase mechanism and subscriptions sold elsewhere, nor could they include links within their apps directing iOS users to the developer’s site where alternative bundles were offered.
Vestager described Apple’s practices as harmful to consumers, accusing the company led by Tim Cook of concealing “essential information” and blocking informed choice. Some users might have paid more because they did not know they could pay less by subscribing outside the app, while others could have failed to access their preferred music provider altogether due to the lack of discoverability within the ecosystem.
As part of the decision, Apple was ordered to remove these provisions and to refrain from similar practices in the future. “From now on, Apple must allow music developers to communicate with their own users freely, whether inside the application, by email, or through any other channel. If Apple fails to comply, the illegal behavior will be detected, ended, and punished,” Vestager stated. The 1.8 billion euro fine also includes a lump-sum component to account for non-monetary harm to consumers and to create a strong deterrent.