The European Commission stated that iPhone and iPad users paid “substantially higher prices for music streaming subscriptions.”
The European Union has fined Apple €1.8 billion (£1.54 billion) for preferring its own music streaming service over competitors.
Apple failed to adequately apprise their device users for over a decade that alternative, less expensive subscription services were available, according to the European Commission’s executive.
According to the report, iPhone and iPad users were required to pay “substantially higher prices for music streaming subscriptions,” and Apple exploited its dominant position in the music streaming services market through its app store.
The imposition of the fine was in response to a complaint lodged by the streaming service Spotify, which prompted Apple to initiate a five-year investigation into how the company prevented app developers from informing users of affordable subscription payment alternatives outside the app store.
Apple allegedly prevented streaming services (e.g., Spotify) from informing users of the pricing for subscription offers not offered by Apple (e.g., Apple Music).
The tech behemoth prohibited app developers from “completely informing iOS users about alternative and less expensive music subscription services outside the app,” according to Margrethe Vestager, the EU’s competition commissioner.
This has impacted millions of European consumers and is therefore unlawful.
Apple stated that to adhere to the ruling, it will permit iPhone users in Europe to utilize third-party app stores and permit developers to provide alternative payment systems.
Additionally, it declared its intention to file an appeal.
Notwithstanding the commission’s inability to ascertain any credible evidence of damage to consumers, a decision was rendered that disregards the facts of a flourishing, competitive, and rapidly expanding market.
Although the amount is noteworthy, it represents a mere 0.5% of Apple’s global revenue, and the company could have been subject to a 10% sanction on global turnover.
This marks the initial levy imposed by the commission under EU anti-monopoly law, and it ranks as the third most substantial imposed on the company.
The largest, €4.34 billion (£3.8 billion), was awarded to Google in retaliation for forcing vendors to pre-install applications, thereby exploiting its control over the Android operating system.
As per the Digital Markets Act, mobile phone manufacturers will be obligated to integrate alternative payment methods and app stores into their operating systems starting this Thursday. Consequently, such examinations and sanctions will cease to occur.
