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EU takes a bite out of Apple with £1.6bn antitrust fine

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TMT Reporter

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The European Commission (EC) has fined Apple €1.84bn (£1.57bn) for “abusing” its dominant position and favouring its own music streaming app over rivals.

The EC said on Monday it has found that the tech giant broke EU antitrust rules by preventing app developers from telling iOS users about cheaper music subscription options outside of the App Store.

It said this may have caused iPhone users to pay “significantly higher prices” for music streaming subscriptions due to Apple’s high commission fees passed on to consumers.

“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” said Margrethe Vestager, Executive Vice-President in charge of competition policy.

“Apple illegally restricted app developers’ ability to inform users about cheaper options to buy [music], outside the [Apple] ecosystem,” she added in a post on X.

The EU first began investigating Apple’s practices in 2020 following an antitrust campaign from Spotify.

The Swedish streamer has claimed Apple leverages its platform dominance to “disadvantage competitive services by unfairly penalizing them for the mere fact that these companies exist to provide the same offerings that Apple increasingly relies on— like music streaming, podcasts, video, audio books and gaming.”

Apple has rejected the EC’s fine and plans to appeal it. It said in a statement that regulators failed to “uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast.” It plans to appeal the fine.

Apple shares fell three per cent on Monday, wiping $78bn (£61bn) off the stock’s value.

Danni Hewson, AJ Bell head of financial analysis, said the fine is “another example of how the EU is getting heavy on antitrust rules.”

“While Apple says it will appeal the decision, these massive fines are not catastrophic for the mega-cap tech stocks. Worst case scenario is that Apple pays the fine and moves on,” she added.

At the start of February, the company posted quarterly revenue of $119.6bn (£94.4bn), a year-on-year increase of two per cent.

More worrying for Apple, Hewson said, is the market’s lagging confidence in its ability to innovate, with growing concerns that the Vision Pro headset is too expensive. “Apple needs something else more affordable to keep driving sales at a fair clip.”

In response to the ruling, Spotify said: “Today’s decision marks an important moment in the fight for a more open internet for consumers. The European Commission (EC) has made its conclusion clear: Apple’s behaviour limiting communications to consumers is unlawful.

“This decision 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.

“While we appreciate the EC addressing this important case, we also know that the details matter. 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.

“Our work will not be done until we succeed in securing a truly fair digital marketplace everywhere and our commitment to helping to make this a reality remains unwavering.”