Why EU fined Apple over €1.8 billion | Explained

European Commission fines Apple €1.8 billion for antitrust violations favoring Apple Music, setting precedent for tech giants.

The story so far: On March 5, the European Commission imposed its first antitrust penalty against Apple for unfairly favouring Apple Music over its rivals. The €1.8 billion ($1.95 billion) antitrust fine culminates the commission’s nearly four-year long investigation following a complaint from Spotify accusing the American company of purposely not disclosing to Apple’s customers about alternative options to pay for their streaming music subscriptions.

The EU’s antitrust regulator found that Apple unfairly favoured its own music streaming service by banning rivals like Spotify from telling users and failing to including link about a cheaper subscription option available outside of the App Store.

(Apple charges upto 30% commission on purchases made through its App Store. It won’t receive this fee if the user directly makes payment on the app’s website.)

The market regulator noted that Apple muzzled streaming music app developers from informing iOS users about alternative and cheaper music subscription services available on their websites.

The fine on Apple comes nearly four years after formal proceedings began in June 2020. While having a dominant market position is not illegal in the EU, the amount of penalty in this case highlights the bloc’s seriousness in handling corporations that abuse their dominant market positions, especially in the world of technology.

This is also one of the biggest fines levied against a major tech company in the EU. Further, under the provisions of the EU’s antitrust laws, the fine exposes Apple against persons or companies affected by anti-competitive behaviour. This means that any person or company affected by Apple’s anti-competitive behaviour in this case may bring the matter before the courts of the EU Member States and seek damages.

This decision comes at a time when Apple is overhauling its app marketplace to comply with Europe’s Digital Markets Act to allow third-party apps on iOS devices.