Apple to appeal US$2bn fine ruled by EU following Spotify's complaint

Apple said it would appeal the US$2bn fine proposed by the European Commission over its App Store rules and possibility of violating Europe’s fair competition laws by directing phone users to its own music streaming service.

This came after Spotify filed a complaint against Apple in 2019, in which Spotify accused Apple of impeding streaming platforms from informing users about payment options outside of the app store for a lower price.

The commission's investigation revealed that Apple bans music streaming app developers from fully informing iOS users about alternative and cheaper music subscription services available outside of the app and from providing any instructions about how to subscribe to such offers.

In particular, the anti-steering provisions ban app developers from informing iOS users within their apps about the prices of subscription offers available on the internet outside of the app and the price differences between in-app subscriptions sold through Apple's in-app purchase mechanism and those available elsewhere.

Additionally, the anti-steering provisions ban app developers from including links in their apps leading iOS users to the app developer's website on which alternative subscriptions can be bought. App developers were also prevented from contacting their own newly acquired users, for instance by email, to inform them about alternative pricing options after they set up an account.

"For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store. They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem. This is illegal under EU antitrust rules, so today we have fined Apple over US$2 billion,” said Margrethe Vestager, who has been the European Commissioner for Competition since 2014.

In response, Apple has criticised the decision made by the commision and said it will appeal. It said that eight years of the commision's investigations have never yielded a viable theory explaining how Apple has thwarted competition in a market that is so clearly thriving.

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"Apple has been a part of Europe for over 40 years, and today, we support more than 2.5 million jobs across the continent. We’ve helped markets thrive, promoting competition and innovation at every turn — and the App Store is an important part of that story. So while we respect the European Commission, the facts simply don’t support this decision," the statement reads.

"The digital music market is a great example of the app economy at work. After all, over the App Store’s 15 years, a simple phrase — there’s an app for that — has become a universal truth. And today, behind every app is a wildly successful company or an aspiring entrepreneur chasing a dream," the company said.

On the other hand, Spotify said in a statement: “This decision sends a powerful message—no company, not even a monopoly such as Apple, can wield power abusively to control how other companies interact with their customers."

MARKETING-INTERACTIVE has reached out to Apple and EU for more information. 

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