Brussels is to impose its first fine on tech giant Apple for allegedly breaking EU law on access to its music streaming services. A Sunday morning report from Financial Times says that fine of 500 million euros It comes after regulators investigated a complaint from Spotify that Apple's policies prevent iPhone apps from telling users about cheaper alternatives to Apple's music service.
The fine, which is around €500 million and is expected to be announced early next month, is the culmination of an antitrust investigation by the European Commission into whether Apple has used its own platform to favor its services over those of competitors. Let's see what it's all about!
The European Commission is investigating whether Apple blocked apps from informing iPhone users of cheaper alternatives to accessing music subscriptions outside the App Store. It all started after music streaming app Spotify filed a formal complaint to European Union antitrust regulators in 2019.
Spotify vs. Apple Music
The European Commission says that Apple's actions are illegal and go against European rules that enforce competition in the single market, and will prohibit the Californian company's practice of blocking music services so that users out of your App Store switch to cheaper alternatives.
Brussels will accuse Apple of abusing its powerful position and imposing anti-competitive business practices on rivals, with the EU claiming the tech giant's terms are "unfair trading conditions."
It is one of the most important financial sanctions imposed by the EU on large technology companies. A series of fines imposed against Google over several years and amounting to around €8 billion are being challenged in court.
Apple has never been fined before for antitrust violations by Brussels, but the company was hit in 2020 with a €1.100 billion fine in France for alleged anti-competitive behavior. The penalty was reviewed and lowered to €0 million after an appeal.
The EU's action against Apple will reignite the war between Brussels and Big Tech at a time when companies are forced to show how they are complying with landmark new rules aimed at opening up competition and allowing small tech rivals to prosper. .
Companies that define themselves as gatekeepers, including Apple, Amazon and Google, must fully comply with these rules under the Digital Markets Law at the beginning of next month. The law requires these tech giants to comply with stricter rules and will force them to allow rivals to share information about their services.
Brussels sanctions Apple
There are concerns that the rules will not allow competition as quickly as some had hoped, although Brussels has insisted that changes take time.
Brussels formally charged Apple in the anti-competitive investigation in 2021. The commission reduced the scope of the investigation last year and dropped the charge of pressuring developers to use their own in-app payment system.
Last month, Apple announced changes to its iOS mobile software, App Store and Safari browser in an effort to appease Brussels after long resisting such steps. But Spotify said at the time that Apple's compliance was a "complete and total farce".
Apple responded by saying that “The changes we are sharing for apps in the European Union give developers options, with new options for distributing iOS apps and processing payments.”
In a separate antitrust case, Brussels is consulting with Apple's rivals over the tech giant's concessions to calm concerns that it is blocking financial groups from its Apple Pay mobile system.
The timing of the Commission's announcement has not yet been set, but it will not change the direction of the antitrust investigation, the people with knowledge of the situation said.
Conclusion
Apple , which can appeal to EU courts, declined to comment on the upcoming ruling but pointed to a statement a year ago when it said it was "glad" the Commission had reduced the charges and said it would address concerns while promoted competition.
"The App Store has helped Spotify become the leading music streaming service across Europe and we hope that the European Commission will end its pursuit of a complaint that has no merit."
