EU Issues $2.7 Billion Fine Against Apple as Result of Spotify’s Anti-Trust Complaint

The European Union (EU) has doled out a €1.84 billion (about $2.7 billion CAD) fine to Apple following Spotify’s ongoing anti-trust complaints.

In an anti-trust dispute, the EU has determined that Apple’s App Store policies have violated regulatory policies. As a result, Apple must pay a hefty fine to the EU. This will be the first fine Apple has ever had to pay to the EU.

A press release from the EU Commission states that it has determined that “Apple bans music streaming app developers from fully informing iOS users about alternative and cheaper music subscription services available outside of the app from providing any instructions about how to subscribe to such offers.” The EU found that this includes informing iOS users within their apps about prices of subscription offers available outside of the app itself.

Apple has hereby been found to be “in breach of Article 102(a) of the Treaty on the Functioning of the European Union (‘TFEU’).”  It’s been determined that Apple cannot restrict third-party music apps from advertising subscription services that may be more affordable than Apple Music.

The EU Commission goes on to state that it accounted for the duration of the infringement as well as its gravity on the market into account. Determining the fine, the regulatory body also analyzed Apple’s total turnover and market capitalization. Additionally, “incorrect information” submitted by Apple during the administrative procedure was also taken into account.

Spotify initially filed an anti-trust complaint with the EU nearly five years ago. At the time, the music streaming company complained about Apple’s App Store policies, largely frustrated with the 30 percent commission from the company. Spotify also argued that Apple restricts how users can quantify deals and access cheaper alternatives than what Apple provides within its ecosystem.

Apple has issued its own press release, surrounding the news. “Today, the European Commission announced a decision claiming the App Store has been a barrier to competition in the digital music market,” the company says. “The decision was reached despite the Commission’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast.”

Apple notes that the EU is issuing its latest decision before the new Digital Markets Act (DMA) comes into play. In the EU, the iPhone maker will be complying with the DMA, allowing third-party app marketplaces on its devices. However, it also comes with a 17 percent commission for developers using their own payment method. Apple is also incorporating  €0.50 fees per app installed after the first million.

In the U.S., Apple is embroiled in a similar legal fight with Fortnite creator Epic Games. The publisher has long argued that Apple’s App Store policies are anticompetitive. Epic Games CEO Tim Sweeney recently expressed issues with Apple’s “new 27% tax on web purchases.” The latest followed as the Supreme Court decided to deny appeals in the Epic v. Apple antitrust case.