EU Antitrust Blow Apple Faces $2 Billion Fine in Spotify Case
On Monday, Brussels imposed a hefty fine of 1.84 billion euros ($2 billion) on Apple for hindering competition in the music streaming sector through restrictions on its App Store. This marks Apple’s first-ever penalty for breaching European Union (EU) rules. The European Commission had charged Apple in 2021 based on a complaint by Spotify and others, accusing the tech giant of preventing these services from informing users about payment options outside of its App Store.
The European Commission argues that Apple’s restrictions created unfair trading conditions, a novel argument in antitrust cases. This approach was also employed by the Dutch antitrust agency in a 2021 decision against Apple in a case brought by dating app providers. The EU has ordered Apple to cease such conduct, and the company has announced its intention to appeal the decision. The appeal process, likely taking several years, will be heard at the General Court in Luxembourg, Europe’s second-highest court.
Apple’s shares experienced a 3.2% decline to $173.88 following the announcement. The fine of 1.84 billion euros is nearly four times the 500 million euros that sources expected the European Commission to impose on Apple. It includes a basic element of 40 million euros, described by European Competition Commissioner Margarethe Vestager as a “parking ticket,” along with an additional 1.8 billion euros as a deterrent. The total penalty amounts to 0.5% of Apple’s global turnover.
In response to the fine, Apple criticized the decision, asserting that it was reached without credible evidence of consumer harm and neglects the thriving and competitive nature of the market. Spotify, the main complainant, welcomed the EU’s decision, though it highlighted ongoing concerns about Apple’s behavior in other markets beyond music streaming.
While the fine itself may not have an immediate cash impact on Apple, industry analysts view it as part of a broader effort to dismantle the closed ecosystem that Apple has established. This move aligns with ongoing regulatory actions in the EU, reminiscent of the past fines imposed on Google over three cases, totaling 8.25 billion euros.
Furthermore, the EU’s order to Apple to remove App Store restrictions corresponds with the requirements of the Digital Markets Act (DMA), new tech rules that Apple must comply with by March 7. In a separate antitrust investigation, Apple seeks to settle by opening its tap-and-go mobile payment systems to competitors. Regulators are expected to accept this offer without imposing fines after seeking feedback from rivals and users.
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