Apple will soon be hit by a massive fine from the European Union following an investigation into the company’s anticompetitive App Store practices regarding music streaming services, according to a new report from the Financial Times.
The report adds that the penalty is expected to be around €500 million ($538 million) and will officially be announced by the EU as soon as next month. The investigation launched by the European Commission kicked off in 2019 following a formal complaint by Spotify, which has always been an ardent and vocal critic of Apple’s anticompetitive App Store practices.
In its complaint, Spotify accused Apple of illegally blocking music streaming apps from informing users of cheaper prices if they subscribe from outside the App Store, a practice known as anti-steering. The European Commission is likely to have accepted Spotify’s accusations and will announce that Apple’s music streaming App Store practices are indeed illegal.
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The expected fine will be one of the EU’s biggest-ever penalties against gatekeeper tech companies. The Commission’s investigation began in 2021 and was originally set to include a review of Apple’s forcing App Store developers to rely on its in-app payment system, but that part of the investigation was abandoned to focus on anti-steering limitations for music streaming apps.
The Commission is set to declare that Apple’s conduct is unlawful and contravenes the EU’s regulations promoting single-market competition. The ruling will prohibit Apple from preventing music services outside its App Store from allowing users to switch to cheaper alternatives. The Commission will also allege that Apple is exploiting its dominant position and imposing anticompetitive trade practices on competitors, asserting that the tech giant’s terms constitute “unfair trading conditions.”
Apple will address some of Spotify’s demands with the iOS 17.4 update, currently scheduled to be released in March. Spotify and many other developers will be allowed to deploy their alternative in-app payment methods for users in Europe. The Cupertino company will also collect a smaller commission over purchases processed through the App Store payment system.
With the iOS 17.4 update, Apple is ushering forward a series of major changes to the app ecosystem on the iPhone. It will allow app installs outside the App Store through alternative app marketplaces, and lower app download commissions while introducing the controversial “Core Technology Fee,” priced at €0.50 per app install per year over the first one million downloads.
The changes will also span the iPhone’s NFC chip which will be opened for third-party Apple Pay competitors. Users and developers will also have the choice to set up default third-party web browsers other than Safari and the ability to deploy non-WebKit web engines on browser apps.
