Apple Faces €500 Million EU Fine Over Allegations of Silencing Music-Streaming Rivals
Apple Inc. is set to receive a hefty fine of close to €500 million ($539 million) from the European Union (EU) over allegations that it silenced music-streaming rivals, including Spotify Technology SA, on its platforms. This penalty, which marks Apple’s first-ever fine from the EU, comes after the regulator’s investigation found that the tech giant violated competition rules by preventing rival music services from informing users about cheaper alternatives outside of its App Store.
The European Commission, led by competition chief Margrethe Vestager, has been actively pursuing strategies to challenge the dominance of Big Tech companies within the bloc through fines and regulatory actions. In the past, Vestager has imposed penalties of over €8 billion on Alphabet Inc.’s Google and ordered Apple to repay €13 billion in allegedly unfair tax breaks from Ireland.
Apple has also faced pressure from individual EU member states. In 2020, the company was fined €1.1 billion in France for anti-competitive behavior, although the amount was later reduced to €372 million after an appeal.
The investigation into Apple’s App Store was initiated following a complaint from Spotify nearly four years ago. Spotify alleged that it was forced to increase the price of its monthly subscriptions to cover costs associated with Apple’s control over how the App Store operates.
In a closed-door meeting between EU officials and Apple in June 2021, the tech giant claimed to have addressed any potential competition concerns arising from Spotify’s complaint. Additionally, Apple is expected to have its settlement proposal accepted in a separate probe related to the EU’s investigation into its tap-and-pay technology. The company has offered to open up access to its near-field communication chip on iPhones to rival digital wallets for a period of ten years.
The EU commission is likely to accept this offer after a market test received positive feedback. The settlement comes after the EU watchdog raised concerns about Apple restricting access to the technology, which could be seen as an abuse of its market power.
Looking ahead, Vestager is preparing for the enforcement of the bloc’s flagship Digital Markets Act (DMA), which is scheduled to take effect on March 7. The DMA aims to prevent competition violations by tech firms before they become entrenched. It will prohibit the most powerful companies from favoring their own services over rivals, restrict the use of personal data across different services, and require them to allow users to download apps from competing platforms.
As Apple faces this significant fine from the EU, it remains to be seen how the company will respond and whether it will continue to face scrutiny over its practices in the future. The outcome of these investigations and the enforcement of the DMA will undoubtedly shape the landscape for tech giants operating within the European market.
