Janice R. Andrews
The European Union has punished tech giant Apple Inc. with an extraordinary punishment of over €500 million in a ground-breaking decision. The fine is the result of a thorough probe by EU authorities into claims of anti-competitive behavior, with a focus on how it handled rival music-streaming companies like Spotify Technology SA on its platforms.
Being the first sanction the EU has ever imposed on Apple, this substantial amount represents a major turning point for the corporation. According to people with knowledge of the situation, Apple was found guilty by the European competition watchdog of preventing competitors’ music services from notifying customers about less expensive options that are accessible outside of its App Store ecosystem.
In reaction to the upcoming penalties, Apple restated its earlier claim that the App Store fostered Spotify’s rise to prominence as the top music streaming service in Europe. According to the Financial Times, the European Commission has declined to provide any formal remarks on the subject.
The European Union’s investigation began almost four years ago when Spotify filed a complaint against Apple. In that complaint, Spotify claimed that it was forced to raise the price of its monthly subscriptions in order to cover the costs of Apple’s purported monopolistic control over the App Store’s operations.
An important turning point in the inquiry occurred in June of the previous year during a meeting between EU authorities and Apple behind closed doors. Apple claimed at this meeting that it had previously taken action to resolve any possible issues with competition that could have arisen from Spotify’s complaints.
In addition to this conflict, Apple is currently the subject of another investigation about its tap-and-pay system. According to sources, Apple and the EU are close to coming to an agreement on this issue. As part of the proposed settlement, Apple has agreed to make its near-field communication (NFC) technology in iPhones more accessible to rival digital wallets for a period of 10 years.
Following official complaints from the EU about its purportedly restrictive policies with relation to NFC technology—which were seen as a misuse of its dominating market position—Apple has made this accommodative move.
Leading the charge to reduce Big Tech’s hegemony in the area has been EU Competition Commissioner Margrethe Vestager. Notably, she has already forced Apple to reimburse large sums for allegedly improper tax benefits from Ireland and slapped significant fines on Alphabet Inc.’s Google.
Vestager’s regulatory agenda is set to receive more support as the Digital Markets Act (DMA) is set to go into effect on March 7. The DMA is a comprehensive framework designed to stop digital companies from engaging in anti-competitive activities.
The DMA forbids favoring a company’s own services over those of competitors, places limitations on the aggregation of personal data across platforms, and requires companies to make it easier for users to download apps from other platforms.
The consequences of these regulatory efforts are about to change the digital landscape as the EU steps up its examination of internet companies. This marks a turning point in the continuing fight to promote fair competition and consumer choice in the tech sector.
