According to the EU Commission, Apple has broken competition law. The reason: The group had abused its dominant market position. It is the next major penalty against a US tech company.
The EU Commission has imposed a fine of 1.8 billion euros on the iPhone manufacturer Apple. The EU Commission announced on Monday that the group was abusing “its dominant position in the market for the distribution of music streaming services” and preventing competitors such as Spotify from informing users about their offers. Apple immediately announced that it would take legal action against the penalty.
Dispute between Apple and Spotify
“Apple has abused its dominant position in the market for a decade,” said EU Competition Commissioner Margrethe Vestager. According to the Commission, the group prevents other music streaming providers from selling subscriptions on iPhones and iPads: They are therefore not allowed to provide information about prices or include links to websites through which a subscription can be taken out. Competitor Spotify therefore filed a complaint with the Brussels competition authorities in 2019.
Apple rejected the allegations. The EU Commission has presented “no credible evidence of harm to consumers”. Market leader Spotify will particularly benefit from the decision, the company explained. The US company has long demanded that Spotify share Apple’s profits from the App Store.
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Apple presented alternatives for its app business in the EU in January. This includes reducing the tax on the sale of digital items and subscriptions via the in-house app store. The previous 30 percent and 15 percent for subscriptions from the second year onwards will become 17 and 10 percent respectively. However, Apple emphasizes that this share should be collected regardless of which payment service an app developer uses. If an app uses Apple’s payment system, an additional three percent is due.
It is the first penalty against Apple for violations of European competition law. The EU Commission has already imposed payments totaling eight billion euros against Google in recent years. Under the Digital Markets Act, additional regulations will also apply to the digital giants from Thursday, according to which Apple in particular must open its systems to competition.
EU competition watchdogs have been scrutinizing American technology platforms for years. The Commission also justifies the current billion-dollar fine by saying that Apple provided incorrect information in the administrative procedure and that the amount should be a deterrent.
Source: Stern
