Reports from the Financial Times suggest that the European Union is on the verge of imposing a hefty fine of approximately 500 million euros on Apple Inc., marking its first major antitrust penalty against the tech giant. Additionally, the EU is considering implementing restrictions on the rules governing the App Store, which it perceives as hindering fair competition.
Expected to be officially announced next month, the fine is a response to a complaint filed by Spotify Technology SA from Sweden in 2019. Spotify alleged that Apple’s tight control over the operations of the App Store forced them to increase their monthly subscription prices to compensate for the associated costs. The European Commission, which initiated an investigation following the complaint, specifically scrutinized Apple’s anti-steering rules. These rules were deemed unnecessary and accused of leading to inflated prices for consumers.
While Apple introduced changes in early 2022, allowing music services like Spotify to redirect users to their websites for subscription sign-ups, thereby bypassing Apple’s revenue share model, Spotify criticized these efforts as merely cosmetic. They argued that the restrictive conditions still persisted, suggesting that Apple’s actions were more symbolic than substantive.
Beyond addressing past grievances, the European Commission has also been proactive in implementing new regulations aimed at preventing anti-competitive practices in the tech industry. The Digital Markets Act (DMA), set to come into full effect in March 2024, establishes a set of guidelines to curb monopolistic behavior among tech giants. Among its provisions, the DMA prohibits dominant firms from prioritizing their own services over those of competitors, thereby fostering a more level playing field in the digital market landscape.
