Michelle ThompsonAccording to the Financial Times, Brussels will impose a fee after Spotify complained about a prohibition on notifying consumers about cheaper options to the App Store.
Apple is apparently facing a €500 million fine from the EU for limits on access to music streaming services, which would be a historic blow to the US technology titan.
The European Commission is looking into whether Apple prevented music streaming services from informing users about cheaper methods to subscribe outside of its app store, where it takes a substantial portion of income.
According to the Financial Times, Brussels intends to slap a €500 million (£427 million) punishment on Apple following years of complaints from companies whose services are offered via iPhone apps.
Spotify, a Swedish streaming firm, filed a complaint with the EU in 2019, arguing that Apple’s app store inhibits choice and competition by imposing a 30% fee on all purchases. Apple also prohibited Spotify and other businesses from informing users on their phones that they might skip the commission and receive a better bargain by joining up on Spotify’s website.
Apple claims its price is appropriate since it invests considerably in creating a secure app store and gives Spotify access to hundreds of millions of customers. However, Spotify claims that Apple’s own music streaming service, Apple Music, does not incur the same additional costs, giving it an edge and making the prices anti-competitive.
According to the FT, the European Commission will declare Apple’s conduct illegal and in violation of the bloc’s rules governing competition in the single market. Five persons familiar with the probe were mentioned. According to reports, the commission may also prohibit music businesses from advertising lower-cost memberships outside of the site.
Apple has never faced a competition charge from the European Commission, but it did receive a €1.1 billion fine from France in 2020 for anti-competitive agreements with two distributors.
However, it and other major technology businesses are facing increased scrutiny over competition concerns. Google is contesting fines totaling more than €8 billion imposed by the EU in three separate competition investigations. Apple defeated a lawsuit filed by Epic Games, the developer of Fortnite, alleging that the app store constituted an illegal monopoly, while Epic won similar proceedings against Google, which owns the Android mobile phone software.
Apple announced last month that it would allow EU customers to download apps without going via its own app store in response to the EU’s Digital Markets Act. The rule, whose specifics were released last year, imposes new requirements on “gatekeepers” such as Amazon, Google, and Amazon, who have significant power in determining mobile phone software choices.
The European Commission has declined to respond. Apple did not make a new reply, but instead referred to a prior statement in which it stated that it will address the commission’s concerns “while promoting competition and choice for European consumers”.
