Europe may fine Apple $540M for anticompetitive practices

In 2019, Spotify raised concerns with the European Union, accusing Apple of hindering competition in the music streaming sector through its payment rules on the App Store. After a span of five years, it seems likely that Brussels will take steps against Cupertino for breaching EU antitrust regulations. 

Unnamed insiders mentioned in a recent article by the Financial Times suggest that the European Union is on the verge of announcing a 500 million euros ($540 million) penalty against Apple for its alleged anticompetitive behavior. This fine, the first of its kind imposed by Europe on Cupertino, is anticipated to be disclosed early next month, as per the sources. The fine is the outcome of the European Commission's investigation into Apple's actions within the streaming industry. 

Over the last five years, EU investigators closely examined the contractual limitations imposed by Apple on developers of applications. These restrictions barred external companies from informing users about potentially more economical alternatives to Apple Music, a move that Spotify criticized in 2019. Apple eventually revised this policy in 2022 following regulatory pressure from Japan. 

The Financial Times report asserts that Apple's behaviors violate Europe's competition regulations, resulting in a significant penalty. Cupertino will need to adjust its business practices in the EU, enabling third-party applications to present competitive pricing outside the App Store on iOS devices. 

In 2023, the European Commission raised initial concerns about Apple, alleging the company's exploitation of its dominant market position. The commission hinted at a potential penalty amounting to 10% of Apple's global annual revenue, though a final decision was still pending. 

Apple might find the 500 million euros fine more favorable compared to the looming threat of a $40 billion penalty. Nevertheless, it's important to highlight that Apple had previously requested Brussels to dismiss the case last year. Both Apple and European officials are choosing not to address the recent speculations from the Financial Times, while Spotify continues to condemn Apple's purported unfair business strategies. 

Recently, Cupertino unveiled modifications to its App Store regulations to align with the EU's Digital Markets Act (DMA). Spotify's CEO, Daniel Ek, criticized these new regulations as "extortion," citing Apple's proposal for a fee per download and a 17% charge for featuring apps on the App Store. Ek argued that these terms would make Spotify's operations, catering to 100 million European users, unsustainable. 

Source: Newsroom