EU Fines Apple $2 Billion In Spotify Antitrust Case – Update

Jesse Whittock
·4 min read

UPDATED with Spotify reaction: Spotify said the EU’s move to fine Apple €1.8 billion ($1.95 billion) for breaking antitrust rules in Europe over music streaming “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.”

“Today’s decision marks an important moment in the fight for a more open internet for consumers. The European Commission (EC) has made its conclusion clear: Apple’s behaviour limiting communications to consumers is unlawful,” Spotify said in a statement following the expectedly heavy penalty levied on the Cupertino, California tech giant.

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Apple said it will challenge the decision, claiming there was no evidence consumers had been harmed.

But the EU’s competition watchdog said an investigation found that Apple had broken antitrust rules in Europe as it “bans music streaming app developers from fully informing iOS users about alternative and cheaper music subscription services available outside of the app and from providing any instructions about how to subscribe to such offers.”

It said this amounted to Apple “abusing its dominant position” by effectively restricting Apple handset users using its operating system (iOS) to its own services and payment methods — which is “illegal under EU antitrust rules.”

The fine is nearly four times the €500M that had been expected.

It added Apple’s practices for over a decade reduced consumers’ ability to make informed choices about their purchases and may have forced them to pay “significantly higher prices for music streaming subscriptions because of the high commission fee imposed by Apple on developers,” which could have been passed on.

The case began in 2019 when Stockholm-based Spotify complained to European officials over the restrictions and Apple charging 30% on the App Store. In July 2020, the Commission opened formal proceedings into Apple’s rules for app developers.

Along with the fine, Apple has been ordered to remove anti-steering provisions that lead consumers away from other services and told to refrain from repeating the infringement or adopting similar practices in future.

“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” said Margrethe Vestager, Executive Vice President in charge of competition policy at the European Commission. “They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem. This is illegal under EU antitrust rules, so today we have fined Apple over €1.8B.”

Apple criticized the ruling, saying, “The decision was reached despite the Commission’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast.”

“The primary advocate for this decision — and the biggest beneficiary — is Spotify [which] 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% 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.”

“We’re proud to play a key role supporting Spotify’s success — as we have for developers of all sizes, from the App Store’s earliest days.”

In post on X, Spotify CEO Daniel Ek discussed the ruling, insisting the internet itself “is at risk” … and that’s why we’re fighting.”

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