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Apple to appeal €1.8 billion EU fine

The European Commission has fined Apple more than €1.8 billion for abusing its dominant position on the market for the distribution of music-streaming apps to iPhone and iPad users through its App Store.

The commission found that Apple had applied restrictions on app developers that prevented them from informing users of its iOS operating system about alternative and cheaper music-subscription services available outside of the app.

These provisions, known as ‘anti-steering provisions' are illegal under EU competition rules. The case was triggered by a complaint from Swedish firm Spotify.

“For a decade, Apple abused its dominant position in the market for the distribution of music-streaming apps through the App Store,” said Margrethe Vestager (commissioner in charge of competition policy).

Apple, however, has said that it will appeal the decision, saying that the commission had failed to uncover “any credible evidence of consumer harm”, and that the European streaming market was “thriving”.

Apple ‘controls every aspect’

The commission said that Apple was currently the sole provider of its app store where developers could distribute their apps to iOS users throughout the European Economic Area (EEA).

“Apple controls every aspect of the iOS user experience, and sets the terms and conditions that developers need to abide by to be present on the App Store and be able to reach iOS users in the EEA,” the EU body said in a statement.

The commission’s decision concludes that Apple's anti-steering provisions amount to unfair trading conditions, in breach of article 102(a) of the Treaty on the Functioning of the European Union.

‘Higher prices’

“Apple's conduct, which lasted for almost ten years, may have led many iOS users to pay significantly higher prices for music-streaming subscriptions because of the high commission fee imposed by Apple on developers and passed on to consumers in the form of higher subscription prices for the same service on the Apple App Store,” the commission stated.

It added that Apple's provisions led to “a degraded user experience”, as iOS users either had to engage in a cumbersome search before they found their way to relevant offers outside the app, or never subscribed to any service because they did not find the right one on their own.

In a statement, Apple said that the commission was issuing the decision just before the new Digital Markets Act (DMA) came into force.

“Apple is set to comply with the DMA in days, and our plans include changes to the rules challenged here,” the company stated, describing the move as “an effort by the commission to enforce the DMA before the DMA becomes law”.