Apple Faces $1.95 Billion EU Fine for ‘Abusing Its Dominant Position’ Over Music Streaming Apps, Preps Appeal

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The long-expected Apple EU fine, totaling close to $2 billion as opposed to the $540 million or so that many had anticipated, has officially been handed down. Apple says it will appeal the penalty, which pertains specifically to alleged App Store abuses affecting music streaming services. Photo Credit: Zhiyue

The European Commission has slapped Apple with a close to $2 billion fine for allegedly “abusing its dominant position on the market for the distribution of music streaming apps.”

The EU executive body unveiled the sizable penalty (specifically totaling $1.95 billion/€1.8 billion) today, after multiple reports suggested that the announcement would arrive on the 5th. Moreover, these same reports, citing anonymous sources, indicated that the fine would come in at a comparatively small $540 million or so.

Of course, the latter sum, having presumably been leaked to the media as one component of a wider strategy, pales in comparison to that which Apple’s actually been ordered to pay. Importantly, this multibillion-dollar fine stemmed from a 2019 complaint levied by Stockholm-based Spotify, and Apple is still facing separate EU investigations as well.

According to the Commission’s description of the alleged wrongdoing committed by Apple, the Cupertino-based business via its App Store prevented “music streaming app developers from fully informing iOS users about alternative and cheaper music subscription services” outside their apps.

Needless to say, given the relative uniformity of music streaming subscriptions’ pricing, the “cheaper” descriptor attached to the alleged infraction will undoubtedly spur debate. Nevertheless, the Commission doubled down and expressed the belief that Apple “may have led many iOS users to pay significantly higher prices for music streaming subscriptions.”

Said significantly higher prices allegedly resulted from the “high commission fee imposed” on developers via the App Store – Spotify has long derided this charge as a 30 percent “tax” – which was then “passed on to consumers in the form of higher subscription prices for the same service,” per the Commission.

Predictably, Apple has criticized the decision (which it intends to appeal), whereas Spotify is applauding the ruling. On the former front, the Apple Music operator, presenting itself as a driving force behind the EU’s digital sector, in a release this morning emphasized stats that had previously been provided to TechCrunch.

Spotify has utilized Apple’s TestFlight beta-testing tool “for almost 500 versions of their app to experiment with new features and capabilities,” per Apple, with other purportedly cost-free advantages including support from Apple’s engineering and App Review teams.

“But free isn’t enough for Spotify,” the iPhone creator proceeded in its approximately 1,600-word message. “They also want to rewrite the rules of the App Store – in a way that advantages them even more.”

Elsewhere in the voluminous text, Apple reiterated that Spotify execs and representatives had “met with the European Commission more than 65 times during this investigation,” with the Daniel Ek-led platform possessing “a 56 percent share of Europe’s music streaming market.”

Regarding Spotify’s official response, the platform touted the Commission’s decision as “an important moment in the fight for a more open internet for consumers.”

But the Apple rival also took the opportunity to call for sweeping regulatory action against the Vision Pro maker, which has elicited pushback with its plans to comply with the Digital Markets Act beginning this Thursday.

“While we appreciate the EC addressing this important case, we also know that the details matter,” Spotify penned. “Apple has routinely defied laws and court decisions in other markets. So we’re looking forward to the next steps that will hopefully clearly and conclusively address Apple’s long-standing unfair practices.”

Lastly, Ek weighed in on the news with an over six-minute video, driving home his opinion that “there’s still more to be done” beyond this “good first step.”