EU Fines Apple $2 Billion for Anti-Competitive Behavior Toward Spotify

[MacRumors]

The European Commission today fined Apple €1.8 billion ($1.95 billion) for anti-competitive conduct against rival music streaming services. In a response published on its website, Apple fiercely attacked the Commission's decision, as well as Spotify's behavior.

The fine comes as the conclusion to a long-running investigation by the EU, triggered by a complaint from Spotify, into Apple's treatment of third-party music streaming services on the App Store. The Commission now says that Apple abused its dominant position in the market by forbidding music streaming apps to tell users about cheaper subscription prices outside the app.

The European Commission has fined Apple over €1.8 billion for abusing its dominant position on the market for the distribution of music streaming apps to iPhone and iPad users ('iOS users') through its App Store. In particular, the Commission found that Apple applied restrictions on app developers preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the app ('anti-steering provisions'). This is illegal under EU antitrust rules.

In an extensive public response, Apple noted that while Spotify has a dominant, 56 percent share of Europe's music streaming market and a "large part of their success is due to the App Store," the company does not pay anything to Apple because it refuses to sell subscriptions in its app. Apple listed a large number of services that it provides to Spotify for free, such as distribution, APIs, frameworks, TestFlight, App Review, and in-person engineering assistance. "But free isn't enough for Spotify," Apple says. "They also want to rewrite the rules of the App Store — in a way that advantages them even more."

Instead, Spotify wants to bend the rules in their favor by embedding subscription prices in their app without using the App Store's In-App Purchase system. They want to use Apple's tools and technologies, distribute on the App Store, and benefit from the trust we’ve built with users — and to pay Apple nothing for it.

Apple said that Spotify claimed in 2015 when it started working on the investigation with the European Commission that the "digital music market had stalled, and that Apple was holding competitors back." "Unfortunately for their case, Spotify continued to grow," Apple added.

Apple noted that three different related cases mounted against it by the European Commission over the past eight years consistently found no evidence of consumer harm and no evidence of anti-competitive behavior.

The reality is that European consumers have more choices than ever. Ironically, in the name of competition, today's decision just cements the dominant position of a successful European company that is the digital music market's runaway leader.

Apple also said that it is set to comply with the EU's Digital Markets Act (DMA) within days, alluding to the release of iOS 17.4, which includes a number of significant changes for users in Europe to meet the legislation's requirements. It believes that today's fine is "an effort by the Commission to enforce the DMA before the DMA becomes law," since it is "not grounded in existing competition law." Apple plans to appeal the decision.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: EU Fines Apple $2 Billion for Anti-Competitive Behavior Toward Spotify

 

[vegetassj4]

Tim Apple might have to only get 1/2 of his bonus this year

 

[till]

Eight years of investigations have never yielded a viable theory explaining how Apple has thwarted competition in a market that is so clearly thriving.

"Our anti-competitive behavior has been ineffective, therefore it's fine."

Not the greatest argument here.

 

[Jamie0003]

Soooo…..are we still all defending Apple in this monopoly stuff?

 

[Apple Mac Daz]

Lmfao serves their arrogance right

 

[contacos]

Imagine video streaming services suing Apple for the same now 🙊

 

[Middling]

In a response published on its website, Apple fiercely attacked Spotify's behavior throughout the investigation leading to the fine.

How very Trumpian of them.

 

[SmugMaverick]

🤣🤣🤣🤣

Here comes the “PULL OUT OF THE EU, THAT’LL SHOW EM” crowd.

I’ve said it before and I’ll say it again, Tim and Apple are late 90s Microsoft

 

[Jarman74]

I find it a bit ironic that Apple seems to be more at odds with the EU than with China. For real - I don't see Apple being punished as harshly by Chinese regulators.

 

[I7guy]

🤣🤣🤣🤣

Here comes the “PULL OUT OF THE EU, THAT’LL SHOW EM” crowd.

I’ve said it before and I’ll say it again, Tim and Apple are late 90s Microsoft

Yes. On point!

 

[Mrkevinfinnerty]

Beautiful. Richly deserved.

 

[StuBeck]

I am awaiting a varied, but intellectually stimulating number of responses to this post. I am sure no one will get outraged at any one else.

 

[philstubbington]

Soooo…..are we still all defending Apple in this monopoly stuff?

They pay more to music artists than Spotify do.

 

[5097842]

Not defending Apple. But Spotify doesn’t support HomePod APIs, or Vision Pro at all. And still no HiFi tier. They could do better.

 

[The Phazer]

Describing the music streaming market as "thriving" is certainly a... errr... take.

Apple's behaviour is so obviously anti-competitive, and it's clear it was a deliberate decision not to comply. It's time to break them up.

 

[Jim Lahey]

Just wait until they go after encrypted messaging. Then we’ll see who’s still laughing.

 

[laptech]

The EU has always been about open markets and competition which is why there is always problems with numerous industries within the EU that persistently complain of cheap imports. Farmers within the EU seem to be the biggest complainers and then steel manufacturers who complain of cheap steel coming in from China. These complaints always fall on deaf ears because the EU wants open competition with in all it's industries.

Any company that wants to operate within the EU needs to understand that they cannot put protections in place to limit or prevent others from working with them or using their products, basically protection their own market because the EU will come after them. Apple telling app developers they cannot put in their app's that there are cheaper options elsewhere was never going to sit well with the EU and at some point they would take action.

Comparison websites got caught out a couple of years ago due to them not indicating in search results that there was cheaper options available. Apple are living in la la land if they thought they could continue to tell app developers providing apps within the EU that they could not put in their apps that cheaper payment options were available elsewhere.

 

[d686546s]

In an extensive public response, Apple noted that while Spotify has a dominant, 56 percent share of Europe's music streaming market and a "large part of their success is due to the App Store," the company does not pay anything to Apple because it refuses to sell subscriptions in its app. Apple listed a large number of services that it provides to Spotify for free, such as distribution, APIs, frameworks, TestFlight, App Review, and in-person engineering assistance. "But free isn't enough for Spotify," Apple added, "They also want to rewrite the rules of the App Store — in a way that advantages them even more."

I find it hard to believe that a "large part of [Spotify's] success is due to the App Store."

The rise of the smartphone has helped them a lot for sure, but I think Apple here massively overstates its own importance. That is not to say that Apple doesn't provide lots of support to make sure there are good apps and services on its platform, but I find it frustrating how Apple now suggests that this isn't for anything other than pure self interest. Apps like Spotify and many many others have made the iPhone the platform that it is. It's a symbiotic relationship and Apple isn't the benign benefactor it makes itself out to be.

I wouldn't have a massive issue with their anti-steering provisions if there were good alternatives as there are on the Mac. They can gatekeep in their store as much as they want as long as I can just download from the developer directly or from a trusted alternative store (like Steam).

But otherwise I'm happy that there is more scrutiny of Apple's practices, and for the record not just Apple alone.

 

[rizzo41999]

Doesn't matter, EU is going to collapse in the next 10 years simply due to demographics.

 

[grjj]

Soooo…..are we still all defending Apple in this monopoly stuff?

being a monopoly is not inherently wrong. Nobody is suing BMW for not selling Volvo cars.

 

[m4mario]

If you read Apple's response, the core message is pretty simple: "We'll show you evidence with numbers that our policies have helped the app economy. And we'll also show you now much money and effort we put to make it happen. Why won't you show us the evidence with numbers that our policies have hurt the app economy?"

 

[falkon-engine]

$2 billion is a lot of cheddar. While I am a believer of openness on where apps can be installed from (like the Macintosh framework), I have to wonder if Apple will eventually consider stopping business in the EU as there is the potential for these massive fines.

 

[d686546s]

I find it a bit ironic that Apple seems to be more at odds with the EU than with China. For real - I don't see Apple being punished as harshly by Chinese regulators.

Because Apple silently complies with Chinese requirements, even in key areas such as privacy:

https://www.nytimes.com/2021/05/17/technology/apple-china-censorship-data.html

 

[m.x]

[...]
In an extensive public response, Apple noted that while Spotify has a dominant, 56 percent share of Europe's music streaming market and a "large part of their success is due to the App Store," the company does not pay anything to Apple because it refuses to sell subscriptions in its app. Apple listed a large number of services that it provides to Spotify for free, such as distribution, APIs, frameworks, TestFlight, App Review, and in-person engineering assistance. "But free isn't enough for Spotify," Apple added, "They also want to rewrite the rules of the App Store — in a way that advantages them even more."
[...]

Can someone help me why Apple now often argues this way? I always thought the $99 or $299 they charge for the Apple Developer Program were exactly for the features they call "free"? My question is not intended to sound sarcastic or snarky, I'm really curious.

 

[SmugMaverick]

$2 billion is a lot of cheddar. While I am a believer of openness (on where apps can be installed from) like on Macintosh, I have to wonder if Apple will eventually consider stopping doing business in the EU as there is the potential for these massive fines.

Or, I don’t know, maybe not break the rules and stop being pieces of trash?