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How Apple became the latest Big Tech firm to be hit with a huge fine by the EU

Result of long-running investigation a €1.8bn fine for tech giant sparked by complaint from streaming music provider Spotify

Executive vice-president for A Europe Fit for the Digital Age and Competition Margrethe Vestager gives a press conference on the anti-trust case with Apple App Store. Photograph: Shutterstock

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Ciara O'Brien
Tue Mar 5 2024 - 05:12

Fresh on the heels of forcing changes to Apple’s mobile system, a new European case has found against the company and its dominance in the market.

The European Commission has long had the Big Tech in its sights, and Apple is, like Microsoft and Google before it, finding its uncomfortable turn in the spotlight.

This time, it was music streaming under investigation, specifically Apple’s application of anti-steering provisions that restrict apps from telling consumers about alternative, cheaper music services available outside of the Apple ecosystem.

The result of the long-running investigation sparked by a complaint from streaming music provider Spotify was a €1.8 billion fine for Apple.

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Publishing its decision, the commission said Apple had stifled competition, a charge the company has vigorously contested. In its response, the company said the commission had failed to uncover “any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast”.

It also noted the fact that the biggest beneficiary of the decision was Spotify, the largest music streaming app in the world with a 56 per cent share of Europe’s music streaming market.

To put it in context, that €1.8 billion fine is less than 1 per cent of the company’s annual turnover. That doesn’t mean it is insignificant, but it is still one of the largest the commission has imposed in an anti-trust case. It is also the first time that Apple has been fined by the commission for a case of this type — its previous skirmishes with the EU resulted in a tax bill deemed due.

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And Apple is, of course, appealing the decision. But it is another step in the gradual chipping away of the company’s walled system. In a matter of days, Apple is changing how apps are distributed on its iPhone system, opening it up to third-party app stores and alternative payments outside the core Apple services.

For consumers, it could lead to cheaper music subscriptions. For all the focus on Spotify, it is important to note that the case is not just about the Swedish company — the decision will have implications for others who want to communicate with customers.

More broadly speaking it is a warning shot for other companies who might be building a large, influential business that they need to consider their actions in case the future could hold a closer look by competition regulators.

The European Commission has made it clear that protecting competition for companies and citizens is a priority, and it is not afraid to impose large fines to do so.

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