The European Union on Sunday is said to impose a hefty penalty of approximately 500 million euros (equivalent to $539 million) the coming month upon tech giant Apple for purported violations of EU competition regulations, as revealed by undisclosed sources in the Financial Times’ recent coverage.
Anticipated to be officially disclosed in the coming month, this significant fine stems from allegations surrounding Apple’s practices within the music streaming sector. Specifically, the European Union had accused Apple of distorting fair competition through its App Store guidelines, which restrict developers from communicating alternative purchasing avenues to users.
Behind the fine
In 2019, Sweden’s Spotify Technology SA ignited the fuse for a probe against Apple, alleging that it had been compelled to hike its monthly subscription fee due to the latter’s alleged monopoly over the workings of the App Store. The EU honed in on Apple’s purportedly restrictive anti-steering regulations, formally charging them in February 2023, arguing that these conditions were superfluous and resulted in inflated prices for consumers.
In response to this, in early 2022, Apple pivoted and allowed Spotify and other music services to guide app users directly to the web for subscription sign-ups. This move circumvented Apple’s hefty revenue share of up to 30%, providing consumers with a wider range of pricing and subscription alternatives. However, Spotify retaliated against Apple’s overture, asserting in June that the restrictions persisted and the adjustments were “mere facades”
Beyond its retrospective scrutiny of corporate transgressions, the European Commission and the EU’s antitrust authority, has enacted comprehensive new regulations to preempt competition infringements by tech giants before they materialize. The Digital Markets Act (DMA), slated to come into full effect in March 2024, delineates a set of guidelines and prohibitions as According to the DMA, it will become unlawful for dominant firms to prioritize their own services over those of competitors. Apple was previously in the news and under the EU’s radar for admitting to break web apps in the EU and making way for third party app installers earlier this year.
