Apple hit with nearly $2 billion E.U. fine for ‘abusing’ app store

Apple CEO Tim Cook, center, leaves the House of Representatives on Capitol Hill on Sept. 14 in Washington, D.C.

The European Commission fined Apple nearly $2 billion Monday for “abusing” its control over music streaming services by squelching competition through its app store, a major broadside as regulators around the globe push to rein in the tech giant’s alleged antitrust violations.

The commission said it found that Apple violated European competition rules by preventing app developers from informing users about “alternative and cheaper” music services. The fine is the result of a yearslong investigation stemming from an antitrust complaint by rival Spotify.

Margrethe Vestager, executive vice president and antitrust chief for the commission, said in a post that Apple’s conduct “had an impact on millions of EU consumers, who were not able to make a #free choice as to where, how, and at what price to buy music streaming subscriptions.”

In 2019, Spotify accused Apple of abusing its power over its App Store and unfairly “taxing” competitors’ apps. By placing fees on companies offering rival products, Apple was “essentially acting as both a player and referee to deliberately disadvantage other app developers,” CEO Daniel Ek wrote at the time.

The European Commission took up charges against the tech giant in 2021, criticizing the company for requiring that developers use its in-app payments systems and for imposing a 30 percent commission on such transactions, an approach it said “distorts competition.” The commission said Monday its investigation uncovered “unfair trading conditions.”

Apple said in a statement in response that it will appeal the 1.8 billion Euro fine.

“Today, the European Commission announced a decision claiming the App Store has been a barrier to competition in the digital music market,” the company said. “The decision 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.”

Spotify said in a statement Monday that the commission’s decision marks “an important moment in the fight for a more open internet for consumers.” But the company said that while it was “pleased” with the move, “it does not solve Apple’s bad behaviour towards developers beyond music streaming in other markets around the world.”

Apple prevailed over a separate antitrust challenge against its app store in the United States, where Epic Games, maker of the popular Fortnite video game series, alleged the tech giant had abused its monopoly by forcing developers to use Apple’s payment processing service without informing consumers about alternatives. A federal appeals court last year affirmed a decision that Epic Games had failed to prove its case that Apple violated federal antitrust laws.

The Justice Department is also currently investigating whether Apple violated U.S. antitrust law by stifling competitors and could face a lawsuit as early as late March, according to reports.