Abuse of market position
EU Commission imposes 1.8 billion euro fine on Apple
March 4, 2024, 1:06 p.m
The EU Commission imposes a high competition penalty on the US tech giant Apple. The Brussels authorities said the company had abused its dominant market position. In addition, the group is said to have provided incorrect information in the proceedings.
The EU Commission has imposed a competition fine of 1.8 billion euros on the tech giant Apple. The US company abused its dominant market position by selling music streaming apps to iPhone and iPad users via its app store, the Brussels authority said. Apple imposed restrictions on app developers that prevented them from informing Apple users about other and cheaper music subscription services. “This is illegal under EU antitrust rules,” the Commission argued.
The music streaming service Spotify and Apple have been arguing for years. The EU Commission already criticized in 2021 that if an app was downloaded via Apple’s App Store, the sales of subscriptions in the apps had to be processed via Apple’s payment platform. The group keeps 30 or 15 percent of the income. Spotify considered it unfair that Apple would have more money left over from its competing music service because of this levy at the same subscription price.
Apple argues that the decision was made even though the Commission could not find any solid evidence that consumers had been harmed. A large part of Spotify’s success is due to the App Store.
Since the launch of the download platform in 2008, Apple has generally taken a 30 percent levy on revenue from digital items or services such as subscriptions. For subscriptions that last longer than a year, the commission drops to 15 percent – even for developers who earn less than a million dollars a year. According to Apple, Spotify does not pay Apple any money because it sells subscriptions outside of the app.
EU wants to deter Apple and Co
Apple presented alternatives for its app business in the EU in January. This includes reducing the tax on the sale of digital items and subscriptions via the in-house app store. The previous 30 percent and 15 percent for subscriptions from the second year onwards will become 17 and 10 percent respectively. However, Apple emphasizes that this share should be collected regardless of which payment service an app developer uses. If an app uses Apple’s payment system, an additional three percent is due.
EU competition watchdogs have been scrutinizing American technology platforms for years. Fines amounting to billions of dollars have been imposed on Google alone. The Commission also justifies the current billion-dollar fine by saying that Apple provided incorrect information in the administrative procedure and that the amount should be a deterrent.