The European Commission is gearing up to fine Apple approximately €500m ($538.8m) over alleged breaches of EU competition law, according to sources cited by the Financial Times on Sunday (18 February).
The probe originated from allegations made by Spotify in 2019, which claimed that Apple hindered third-party music services on its devices while promoting its proprietary Apple Music service.
The investigation comes amid accusations that Apple restricted third-party apps from informing users about more economical subscription alternatives outside of its native App Store.
The European Commission is expected to accuse Apple of abusing its dominant position in the market and will seek to ban what it deems as “unfair trading conditions”, particularly related to the tech giant’s music service subscription policies.
This marks a significant escalation of Brussels’ efforts to address anticompetitive practices by major technology companies.
One point of contention has been Apple’s App Store rules, which mandate companies like Spotify to use Apple’s billing service, subjecting them to a commission of up to 30%.
Brussels initiated a formal antitrust investigation against Apple in 2021, with a subsequent narrowing of the investigation’s scope in the past year.
If imposed, the €500m fine would stand as one of the most substantial financial penalties the EU has levied against a major technology company.
This enforcement aligns with a broader crackdown within the EU, coinciding with the upcoming enactment of the Digital Markets Act in March.
According to research and analysis company GlobalData’s 2023 thematic intelligence report on technology regulation, regulators will come after tech companies in 12 regulatory arenas: AI ethics, antitrust, copyright, data privacy, data security, ESG (environmental, social and governance), misinformation, net neutrality, obstruction of justice, online harm, tax avoidance and US-China tech sanctions.
The legislation aims to curb anti-competitive practices by tech giants considered as “gatekeepers” including Apple, Amazon and Google.
Smaller internet companies and tech businesses such as Spotify have long raised concerns about being unfairly constrained by the business practices of these industry leaders.
Apple, subject to the Digital Markets Act, will be mandated to allow third-party developers to distribute apps outside the iOS Store and permit direct billing for their services.
In response to EU regulations, Apple has announced changes to its iOS, Safari and App Store within the EU. The company has also declared its intention to enable software developers to distribute apps to Apple devices through alternative stores.
