Gold Standards or Rags selling half eaten Apples? Fined over thieving practices!
Today, the European Commission (EC) has imposed a substantial €1.8 billion fine on Apple for its misuse of market dominance in the distribution of music streaming apps to iOS and iPadOS users through its App Store. The Commission concluded that Apple’s imposition of restrictions on app developers, preventing them from informing users about alternative and cheaper music subscription services outside the app, violates EU antitrust regulations. The investigation revealed that Apple prohibits music streaming app developers from fully informing iOS users about alternative and cost-effective subscription services available outside the app, as well as from providing instructions on how to subscribe to such services. This practice, known as ‘anti-steering provisions,’ has been deemed illegal by the EC. Essentially, iOS users have two options for subscribing to third-party music streaming services: through the App Store or directly on the service’s website. The latter option tends to be more cost-effective since Apple does not take a commission. However, Apple restricts any advertising of this price disparity for obvious financial reasons.
Apple’s anti-steering provisions go as far as prohibiting app developers from including links in their apps, leading iOS users to the developer’s website for subscription purposes. Additionally, they cannot contact users by email to inform them about alternative pricing options after account setup. The EC’s decision highlights that these provisions create unfair trading conditions and negatively impact iOS users’ ability to make informed purchasing decisions regarding music streaming subscriptions. Apple’s actions may have resulted in many iOS users paying significantly higher prices for subscriptions due to Apple’s high commission fees. The €1.8 billion fine is intended to serve as a deterrent for Apple and other similarly sized companies from engaging in similar infringements. Furthermore, Apple has been ordered to remove the anti-steering provisions and refrain from repeating such behaviour in the future.
Apple has expressed its intention to appeal the decision and has issued a press release criticizing Spotify, referring to it as the main supporter of the EC’s decision. Apple claims that despite Spotify’s significant market share in Europe, it pays nothing to Apple because it does not sell subscriptions through the App Store, thus avoiding the ‘Apple tax’. Apple accuses Spotify of attempting to bend the rules in its favour by embedding subscription prices in its app without utilizing the App Store’s In-App Purchase system while still benefiting from Apple’s tools and technologies without compensation. In conclusion, Apple asserts that the EC’s decision reinforces Spotify’s dominant position in the digital music market in Europe, ironically contradicting the goal of promoting competition.
