The EU set to hit Apple with €500m Fine Over its Music Streaming Service

Introduction              

Apple is set to be fined in the region of €500m for breach of EU law. This would be the result of a long investigation by the European Commission into whether it restricted access to music streaming services. How did this fine come about, and how does it fit into the wider context of curbing Big Tech?

Background

In 2019, music-streaming app Spotify made a formal complaint to regulators about Apple purportedly blocking users from cheaper alternatives to access music subscriptions outside the App Store.

Apple’s App Store rules include a 30% fee on apps and in-app purchases. Spotify has argued that limiting subscription options to in-app purchases, forces platforms to pay Apple a 30% fee and benefits the tech giant’s own product: Apple Music.

Since the enforcement of the EU’s Digital Markets Acts (DMA), Apple has also come under increased pressure, moving towards allowing EU customers to download apps without the App Store as the intermediary.

The Fine

The Financial Times has reported that the Commission will be announcing a fine in the coming weeks. When it comes to penalties for anti-competitive behaviour, these are capped at 10% of the company’s global turnover. It is suspected that Brussels will accuse Apple of abusing its powerful position, imposing anti-competitive trading practices and finally set the fine within the region of €500m.

Wider Context

The EU’s crackdown on Apple fits into a wider context of curbing Big Tech’s power over the past few years. Indeed, companies such as Google have received a number of fines from Brussels for anti-competitive behaviour. While this is set to be Apple’s first fine by the EU, in 2020, it was already hit by a €1.1bn fine in France for alleged anti-competitive behaviour.

Finally, with increasing regulation being put in place surrounding Big Tech dominance, such as the DMA, one can expect continued fighting between Big Tech and regulators for the foreseeable future.

Conclusion

In conclusion, the impending fine of around €500m against Apple by the European Commission underscores the ongoing battle between regulatory bodies and tech giants regarding anti-competitive practices. The investigation, spurred by Spotify's complaint, highlights concerns over Apple's control within its ecosystem, particularly regarding app store fees and access to alternative services.

This penalty, though significant, reflects a broader trend within the EU of scrutinizing and penalizing monopolistic behaviour among major tech companies. As the EU continues to enact measures like the Digital Markets Act to rein in Big Tech dominance, the conflict between regulators and these corporations is likely to persist, shaping the landscape of digital markets for the foreseeable future.

Update (4 March 2024): the European Commission has imposed a fine of €1.8bn on Apple.

By Scott Hickman