Apple hit with $2 billion EU antitrust fine

kovop / Shutterstock.com

Apple has been fined 1.84 billion euros ($2 billion) for thwarting competition from music streaming rivals via restrictions on its App Store, the iPhone maker's first ever penalty for breaching EU rules.

A basic penalty of 40 million euros was inflated by a huge lump sum included as a deterrent - a first for the European Union's antitrust authorities.

The European Commission charged Apple last year with preventing Swedish streaming service Spotify and others from informing users of payment options outside its App Store, following a 2019 complaint by Spotify.

It said on Monday, Apple's restrictions constituted unfair trading conditions, a relatively novel argument in an antitrust case and also used by the Dutch antitrust agency in a decision against Apple in 2021 in a case brought by dating app providers. It ordered it to stop such conduct.

Apple said it would appeal the decision. A ruling at the Luxembourg-based General Court, Europe's second-highest, is likely to take several years. Until then, Apple will have to pay the fine and comply with the EU order.

The fine was nearly four times the 500 million euros sources with knowledge of the matter had told Reuters they expected the European Commission to impose on Apple.

It comprised a basic element of 40 million euros - described by European Competition Commissioner Margarethe Vestager as a "parking ticket" for the US tech giant - plus 1.8 billion euros slapped on top as a deterrent.

The 1.84 billion euros total is equal to 0.5 per cent of Apple's global turnover, she said.

Apple criticised the decision, saying in a statement it "was reached despite the Commission's failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast".

"The primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden. Spotify has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation," it said.

"Millions of European music streaming users were left in the dark about all available options," Vestager told a press conference.

"And Apple's anti-steering rules also made consumers pay more for such services because of the high commission fee imposed on developers and passed on to consumers."

In the past decade, the EU regulator has fined Alphabet's Google a total 8.25 billion euro over three cases.

Vestager's order to Apple to remove its App Store restrictions echoes the same requirement under new EU tech rules known as the Digital Markets Act (DMA) which Apple has to be in compliance with on March 7.

In contrast to the music streaming case, Apple is seeking to settle another EU antitrust investigation by offering to open up its tap-and-go mobile payment systems to rivals.

EU regulators, who subsequently sought feedback from rivals and users, will likely accept its offer without fining the company.

More from Business

  • UAE, Ukraine Presidents witness CEPA signing

    President His Highness Sheikh Mohamed bin Zayed Al Nahyan and Volodymyr Zelenskyy, President of Ukraine, on Monday attended the signing of the Comprehensive Economic Partnership Agreement (CEPA) between the two countries.

  • New AED 25 hour event parking tariffs begin in Dubai

    Vehicle parking at major events in Dubai will be charged at AED 25 an hour coming into effect on Monday, parking company Parkin confirmed.

  • Abu Dhabi issues new endowment company rules

    Abu Dhabi Department of Economic Development (ADDED), in collaboration with The Endowments and Minors’ Funds Management Authority (Awqaf Abu Dhabi), has issued a resolution on the establishment and licensing of endowment institutions in Abu Dhabi.

  • IDC 2025 discusses global disruptions, defence preparedness

    The International Defence Conference 2025 commenced on Sunday at Emirates Palace in Abu Dhabi, bringing together defence and security leaders, experts, and companies from around the world to discuss key challenges and opportunities in the sector.

  • Dubai Energy Council reviews carbon emissions progress

    Ahmed bin Saeed chaired the Dubai Supreme Council of Energy meeting on Sunday, which reviewed progress in carbon emission reduction technologies in alignment with the UAE’s Net Zero 2050 Strategy and the Dubai Carbon Abatement Strategy 2030.