The EU antitrust authority asked the Commission to fine Apple for $500 million. In 2024, Brussels will ramp up its fight against big tech.
The European Union will fine Apple with a $539 million ruling, citing unfair competition practices in the music streaming segment. Apple Music, the software targeted by this fine, has the second-largest market share in this sector at 13.7%.
According to the EU competition watchdog, Apple failed to fairly publicize other music apps on its proprietary store with lower prices than Apple Music. The issue was brought up by Spotify, the world’s largest music streaming service.
Spotify lamented the Apple Store was undermining its position in the market. Moreover, the Apple Store limits in-app payments and forces users to pass through Apple services instead. The Cupertino company therefore takes up to 30% of any in-app payment, including Spotify subscriptions.
The charge on the in-app payment system was, however, dropped. The EU watchdogs, however, deemed the lack of publicity for cheaper service an “unfair trading condition”.
Apple will be able to appeal the decision in Brussels. This will be the largest fine issued by the European Union on Apple, though single European countries have charged higher amounts in the past.
In 2020, France charged Apple with a record $1.2 billion fine, later reduced to $372 million on appeal.
The EU’s crackdown on big tech
The European Union is becoming bolder with its fines and competition practices against American tech companies. Before the $539 million fine to Apple, the EU charged Alphabet (Google) with an $8 billion reparation for evading taxes in the bloc.
EU competition chief Margrethe Vestager said controls will become harsher as the bloc tries to dismantle big tech’s dominance in Europe. In a CNBC interview, she said American companies have become more compliant with European rulings.
“I think the atmosphere in the discussion has changed quite a lot,” she said. “From the very early days when I opened the first Google case walking up the hill in Washington, everyone said ‘Oh my god what’s that woman doing’”.
Now, Vestager continued, she has the backing of American authorities, from the SEC to Congress.
Next March, the European Union will unveil the Digital Markets App, which will limit the power of “gatekeepers” such as Google, Amazon, and Apple. The new law will try to empower smaller European tech firms against the dominance of the American Silicon Valley giants.
Under the new act, tech firms will also be forbidden from gathering personal data across the Union to compete with each other. They will also be forced to allow the download of rival apps on their services.
