On Monday, EU Imposes $2 Billion Antitrust Fine on Apple in the Spotify Case as per Reuters. It’s the first time Apple’s been fined like this. The fine is meant to stop them from doing it again. They got in trouble for stopping Spotify and other music apps from telling users about payment options outside of Apple’s App Store. Spotify CEO Daniel Ek wasn’t happy about the changes Apple wanted to make to the App Store! This all started because Spotify complained to the European Commission in 2019. They were upset about Apple’s 30% fee on App Store purchases. The Current Conversion rate $1 = 0.9217 euros.
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EU Enforcer’s Statement on Fine on Apple in the Spotify Case
- The European Union enforcer argued that Apple’s restrictions were unfair trading conditions.
- This was a relatively new argument in an antitrust case.
- The Dutch antitrust agency also used this argument against Apple in a 2021 case involving dating app providers.
The Size of the Fine on Apple in the Spotify Case
- The fine was much larger than the 500 million euros that sources had expected the Commission to impose on Apple.
- An additional lump sum of 1.8 billion euros was added as a deterrent and because a significant part of the harm caused by Apple’s conduct was non-monetary.
- This brought the total fine to 1.84 billion euros, which is 0.5% of Apple’s worldwide turnover.
EU Antitrust Chief’s Statement
- EU antitrust chief Margrethe Vestager emphasized that this was the first time the Commission had added a deterrent lump sum to an antitrust fine.
- Apple had abused its dominant position in the market for distributing music streaming apps through the App Store.
- Vestager ordered Apple to remove the anti-steering provisions and to avoid similar practices in the future.
Apple’s Response on Fine
- Apple criticized the EU decision and announced that it would challenge it in court.
- The company claimed that the decision overlooked the realities of a thriving and competitive market.
- Spotify, the biggest beneficiary of the decision, pays no commission to Apple as it sells its subscriptions on its website.
- Vestager’s order to remove App Store restrictions aligns with new EU tech rules known as the Digital Markets Act.
Comparison with Google’s Fine
- Apple’s fine, amounting to 1.84 billion euros, is about a quarter of the 8.25 billion euro fines imposed on Alphabet’s Google in three previous cases.
Settlement and Future Compliance
- Apple is seeking to settle another EU antitrust investigation by offering to open up its tap-and-go mobile payment systems to rivals.
- EU regulators will likely accept this offer without fining the company.
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FAQ’s
What is the fine imposed on Apple in the Spotify case?
The European Union levied a historic fine of $2 billion on Apple for antitrust violations in the Spotify case. This fine reflects concerns over Apple’s practices in restricting competition in the digital marketplace.
What led to the EU imposing a fine on Apple in the Spotify case?
The EU’s decision to fine Apple stemmed from allegations that the tech giant abused its dominant position in the distribution of music streaming apps through the App Store. Apple’s restrictions on app developers and its imposition of a 30% fee on App Store transactions were key factors in the case.
How does the fine affect Apple’s relationship with Spotify and other app developers?
The fine on Apple in the Spotify case underscores the EU’s commitment to promoting fair competition and consumer choice in the digital ecosystem. It sends a strong message to Apple and other platform providers to ensure transparency and level playing fields for all app developers.
