Apple Slapped With $2 Billion EU Fine Over ‘Abusive’ Streaming Music App Restrictions After Complaint by Spotify; Apple Says It Will Appeal

Todd Spangler

After a years-long investigation, the European Commission levied a fine against Apple of €1.8 billion — about $1.95 billion — for “abusing its dominant position on the market for the distribution of music streaming apps” to iPhone and iPad users.

The EU said Monday its investigation into Apple, which was kicked off by a complaint by Spotify, 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, which is illegal under EU antitrust rules. The EU ordered Apple to remove the so-called anti-steering provisions from the App Store and “to refrain from repeating the infringement or from adopting practices with an equivalent object or effect in the future.”

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“Apple will have to open the gates to its ecosystem, to allow end users to easily find the apps they want, pay for them in any way they want, and use them on any device they want,” Margrethe Vestager, the EU’s top antitrust official, said in a statement. “Today’s decision shows that competition law continues to provide a very powerful basis to tackle illegal behavior by companies like Apple to the benefit of consumers.”

In a statement, Apple said it will appeal the EU decision. The company claimed Europe’s digital music market was “thriving” and that the European Commission’s probe failed to “uncover any credible evidence of consumer harm.”

“In 2015, Spotify started working with the European Commission on an investigation with little grounding in reality,” the tech giant said in part. “They claimed the digital music market had stalled, and that Apple was holding competitors back. Unfortunately for their case, Spotify continued to grow — and thanks in part to the App Store, eclipsed every other digital music business in the world.”

Apple claimed Spotify has a 56% share of Europe’s music streaming market, more than double its closest competitor, and that Spotify “pays Apple nothing for the services that have helped make them one of the most recognizable brands in the world.”

“A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update and share their app with Apple users around the world. We’re proud to play a key role supporting Spotify’s success — as we have for developers of all sizes, from the App Store’s earliest days,” Apple said in the statement.

In March 2019, Spotify officially filed an antitrust complaint against Apple in Europe, contending that Apple unfairly limits choice and competition through App Store rules and practices.

Spotify said in a statement Monday that the European Commission’s ruling “sends a powerful message — no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers.”

“Apple’s rules muzzled Spotify and other music streaming services from sharing with our users directly in our app about various benefits — denying us the ability to communicate with them about how to upgrade and the price of subscriptions, promotions, discounts or numerous other perks,” Spotify said in the statement. “Of course, Apple Music, a competitor to these apps, is not barred from the same behavior. By requiring Apple to stop its illegal conduct in the EU, the EC is putting consumers first. It is a basic concept of free markets — customers should know what options they have, and customers, not Apple, should decide what to buy, and where, when and how.”

Spotify added that “Apple has routinely defied laws and court decisions in other markets” and that the streamer is “looking forward to the next steps that will hopefully clearly and conclusively address Apple’s longstanding unfair practices.”

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