Thu. May 23rd, 2024

European Commission fines Apple €1.84 billion for abuse of dominant position

Natasha Kumar By Natasha Kumar Apr16,2024

 European Commission fines Apple 1.84 billion euros for abuse of dominant position

Josh Edelson/AFP For the European Commission, Apple has put in place restrictions to prevent its users from becoming aware of alternative and cheaper services available outside its ecosystem.. < p>TECH –Apple has been condemned by the European Commission (EC) for “abuse of dominant position” for competition violations concerning the online music market. Brussels thus imposes a fine of 1.84 billion euros, following a complaint in 2020 from the very popular streaming platform, Spotify. For the European Commissioner for Competition, the Danish Margrethe Vestager, this fine is “necessary” and “proportionate”. For its part, Apple, which has decided to appeal, believes that the Commission has discovered no credible evidence and “ignores the realities” of the market. 

This is the first time that the Californian giant has received a European sanction for facts related to competition. In 2016, the EC ordered Apple to pay a record fine of 13 billion euros to Ireland for having benefited from tax advantages deemed illegal. The firm and Dublin appealed and four years later the EU court overturned the sanction. The executive then filed an appeal before the highest European court, the Court of Justice.

Unfair commercial conditions

While waiting for its decision and the end of an endless saga, the EC is once again penalizing Apple; The case dates back to 2020, when Spotify, a Swedish music streaming platform, contacted Brussels to denounce Apple's practices, deemed to be contrary to European rules. It is a question of “unfair competition” which does not make it possible to “guarantee freedom of choice for consumers and a fair environment for developers”. An investigation was then opened in June 2020 and, Monday March 4, 2024, the European Commission finally ruled in favor of Spotify. “For a decade, Apple abused its dominant position in the market for the distribution of streaming music applications” through its AppStore application store, explains Competition Commissioner Margrethe Vestager. A press release states that the investigation found that Apple “prohibits developers of music streaming apps from fully informing iOS users of the existence of other music streaming services.” cheaper music subscriptions available outside the app and provide them with information on how to subscribe to these offers.”

In other words, Apple has put restrictions in place to prevent app developers from promoting “alternative, cheaper services available outside of the Apple ecosystem” to iPhone and iPad users. And this “is illegal”, insists Margrethe Vestager.

This type of practices which “constitute unfair commercial conditions (…), are neither necessary nor proportionate for the protection of Apple's commercial interests (…) and have a negative impact on the interests of iOS users , who cannot make informed and effective decisions about where and how to purchase music streaming subscriptions for use on their device,” it further reads. 

The Competition Commissioner judges the amount of the fine “proportionate to the global revenues” of the Californian group and “necessary to be dissuasive”. The sanction is all the more “necessary” as a “significant part of the damage is non-monetary and cannot be properly taken into account”. The Commission's aim is to “also deter other companies of similar size and with similar resources from committing the same infringement”. The group must therefore cease these practices and avoid adopting equivalent systems in the future.

Apple appeals

The news is poorly received in Cupertino, headquarters of the bitten apple firm, which has announced its intention to appeal. The Californian giant deplores a “sanction taken despite the Commission's inability to discover the slightest credible evidence of harm caused to consumers”. For Apple, the amount of the fine testifies to the EC's “ignorance” of the “realities of a thriving, competitive and rapidly growing market”.

As for Spotify, the platform is accused by Apple for wanting to benefit “without paying” from the advantages of the AppStore and its “tools and technologies”. 

As a reminder, Apple has already been convicted in France for competition violations. In December 2022, the Paris Commercial Court fined Apple one million euros for imposing unbalanced conditions on mobile application developers. The complaint, which dated back to 2017, was filed by the Minister of Economy and Finance, Bruno Le Maire. 

Two years earlier, the Competition Authority (DGCCRF) issued a sentenced to a fine of 25 million euros, for “deceptive commercial practices by omission”.

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Natasha Kumar

By Natasha Kumar

Natasha Kumar has been a reporter on the news desk since 2018. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Times Hub, Natasha Kumar worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my natasha@thetimeshub.in 1-800-268-7116

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