Music streaming: EU Commission imposes 1.8 billion euro fine on Apple

The EU Commission has imposed a fine of 1.8 billion euros on the iPhone manufacturer Apple . The EU Commission said the group was abusing “its dominant position in the market for the distribution of music streaming services” and preventing competitors such as Spotify from informing users about other and cheaper offers. “This is illegal under EU antitrust rules,” the Commission argued.

Apple immediately announced that it would take legal action against the penalty.

The music streaming service Spotify and Apple have been arguing for years. The EU Commission had already criticized in 2021 that sales of subscriptions in apps had to be processed via Apple’s payment platform if an app was downloaded via Apple’s App Store. The group keeps 30 or 15 percent of the income.

Spotify thought it was unfair that Apple was left with more money for its competing music service because of this levy for the same subscription price.

Apple: no hard evidence

Apple rejected the allegations. The EU Commission was unable to find any solid evidence that consumers had been harmed. A large part of Spotify’s success is due to the App Store.

Since the launch of the download platform in 2008, Apple has generally charged a 30 percent levy on revenue from digital items or services such as subscriptions. For subscriptions that last longer than a year, the commission drops to 15 percent – even for developers who earn less than a million dollars a year. According to Apple, Spotify does not pay Apple any money because it sells subscriptions outside of the app.

Apple presented alternatives for the app business in the EU in January. This includes reducing the tax on the sale of digital items and subscriptions via the in-house app store. The previous 30 percent and 15 percent for subscriptions from the second year onwards will become 17 and ten percent respectively. However, Apple emphasizes that this share should be collected regardless of which payment service an app developer uses. If an app uses Apple’s payment system, an additional three percent is due.

Commission takes action against Apple and Google

The basis for the current decision is the Digital Markets Act (DMA), which subjects technology companies to stricter regulation if they have a certain number of users. If they fail to comply, companies face penalties of up to ten percent of annual sales.

It is the first penalty against Apple for violations of European competition law. The EU Commission had already imposed payments totaling eight billion euros against Google in recent years.

The EU Commission has imposed a fine of 1.8 billion euros on the iPhone manufacturer Apple . The EU Commission said the group was abusing “its dominant position in the market for the distribution of music streaming services” and preventing competitors such as Spotify from informing users about other and cheaper offers. “This is illegal under EU antitrust rules,” the Commission argued.

Apple immediately announced that it would take legal action against the penalty.

The music streaming service Spotify and Apple have been arguing for years. The EU Commission had already criticized in 2021 that sales of subscriptions in apps had to be processed via Apple’s payment platform if an app was downloaded via Apple’s App Store. The group keeps 30 or 15 percent of the income.

SOURCE