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The EU commission today announced that it is fining Apple 1.8 billion euros, or about $2 billion USD, for abusing its dominant position in the market for distribution of music streaming services, with ‘abusive’ App Store rules. Specifically, the EU says Apple’s anti-steering provisions prevented Spotify and other Apple Music competitors from telling customers about alternative ways to subscribe.
Apple rejects the findings and will appeal the decision, as indicated by its just-published strongly worded press release. Apple says the EU has found no evidence of consumer harm, and “ignores the reality of a market that is thriving, competitive and growing fast”.
The fine is the culmination of an EU investigation that has spanned more than a decade, with Spotify first filing a formal complaint in 2019. The $2bn fine amount is proportionate to Apple’s global revenues and “necessary to achieve deterrence”, according to the EU commission ruling.
The EU says that Apple’s rules prevented music streaming app developers from telling iOS users about other ways to subscribe to services outside of the App Store, which can theoretically be cheaper as they would not be subject to Apple’s 15-30% commission on in-app purchases.
The anti-steering provisions banned developers from telling users about alternative payment methods, the price differences, and providing links to the developer’s website to purchase a subscription outside of the App Store.
The EU says that the anti-steering provisions are deemed as “unfair trading conditions”, which makes them illegal under EU law. In addition to the fine, Apple has been ordered to remove the anti-steering provisions going forward.
This has already happened, at least in part. In the time since the EU investigation was opened, Apple has relaxed the App Store rules in several ways. The latest App Store rules allow for “reader apps”, of which Spotify is included, to add an external link inside their app for account management and payment options, and are also allowed to freely send emails to its customers, for instance.
It’s unclear whether the current incarnation of App Store rules are still considered to be in breach of the law, in the eyes of the EU. Apple is also imminently rolling out alternative developer business terms in the EU to comply with the Digital Markets Act. This gives Spotify and other music services even more freedoms, in theory.
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