Apple gets Hit Hard

The European Commission, the executive arm of the European Union, announced on Monday that it has imposed a significant antitrust fine of 1.8 billion euros ($1.95 billion) on Apple. This fine comes as a result of Apple's alleged abuse of its dominant position in the market for the distribution of music streaming apps.

According to the commission, Apple imposed restrictions on app developers that hindered them from informing iOS users about alternative and more cost-effective music subscription services available outside of the official App Store ecosystem. Additionally, Apple allegedly prohibited developers of music streaming apps from providing instructions on how users could subscribe to these alternative offers.

This marks Apple's first antitrust fine from the European Commission and is one of the largest fines ever levied against a technology company by the EU. Following the announcement, Apple's shares experienced a decline of approximately 2.5% during morning trading in the United States.

The European Commission initiated an investigation into Apple in response to a complaint from Spotify in 2019. The investigation focused on contractual restrictions imposed by Apple on app developers, which allegedly prevented them from informing iPhone and iPad users about alternative music subscription services at lower prices outside of the App Store.

According to the commission, Apple's conduct persisted for nearly a decade and may have resulted in many iOS users paying significantly higher prices for music streaming subscriptions due to the high commission fees imposed by Apple on developers, ultimately passed on to consumers in the form of elevated subscription prices within the Apple App Store.

In response to the fine, Apple issued a statement asserting that Spotify stands to benefit the most from the EU's decision. Apple highlighted Spotify's dominant position in the music streaming market and emphasized that Spotify pays nothing to Apple for subscriptions sold outside of its iOS app.

Furthermore, Apple underscored its role in Spotify's success, citing the App Store and various tools and technologies provided to Spotify for app development and distribution. Apple stated that it does not collect a commission on subscriptions purchased directly through Spotify's website.

Over the years, developers have criticized the 30% fee charged by Apple on in-app purchases, and Spotify welcomed the commission's decision as a step towards a more open internet for consumers. Spotify emphasized that Apple's rules restricted its ability to communicate directly with users about subscription upgrades, prices, promotions, and other benefits, while Apple Music, a competitor, was not subject to similar constraints.

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As Well here is a link to the article that inspired this blog: