The European Union has struck Apple with a massive fine of €1.84 billion ($2 billion) over the Cupertino company’s handling of rival music streaming apps on the App Store. The EU fine was handed by the European Commission, and Apple is already planning an appeal (via TechCrunch).
The EU fine is primarily imposed on Apple’s policy of limiting music streaming providers such as Spotify from informing users of cheaper subscription prices outside the App Store, a practice known as anti-steering. Spotify, one of the most ardent critics of the App Store policies, has repeatedly pointed out anti-steering as a disadvantage for itself against Apple Music.
The European Commission, which handed the €1.84 billion fine, agrees with Spotify’s accusations against Apple. The investigation that led to today’s EU fine first kicked off in April 2021. While it was quite expected that Apple would be subject to a substantial fine from the EU, a report from the Financial Times pegged the expected fine at around €500 million ($538 million).
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The announcement of the EU fine today is significantly higher than was expected and is one of the biggest-ever fines in the Union’s history. Following the fine’s announcement, Apple has issued a statement confirming it will appeal the European Commission’s findings.
Apple has been a part of Europe for over 40 years, and today, we support more than 2.5 million jobs across the continent. We’ve helped markets thrive, promoting competition and innovation at every turn — and the App Store is an important part of that story. So while we respect the European Commission, the facts simply don’t support this decision. And as a result, Apple will appeal.
Apple statement
The Commission declared that Apple’s conduct is unlawful and contravenes the EU’s regulations promoting single-market competition. The ruling also prohibits Apple from preventing music services outside its App Store from allowing users to switch to cheaper alternatives. The Commission concluded 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, which could be released in the next few days. 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.
