Apple hit with over 1.8 billion euro EU antitrust fine in Spotify case

Apple has been fined by the EU for antitrust violation, preventing music streaming services like Spotify from offering payment options outside App Store.

The European Commission's decision was triggered by a 2019 complaint by Spotify over restrictions and Apple's 30% App Store fees. (REUTERS)

Apple was hit with an EU antitrust fine of over 1.8 billion euros ($1.95 billion) on Monday, its first ever, for preventing Spotify and other music streaming services from informing users of payment options outside its App Store.

The European Commission's decision was triggered by a 2019 complaint by Swedish music streaming service Spotify over this restriction and Apple's 30% App Store fees.

The European Union competition enforcer said Apple's restrictions constituted unfair trading conditions, a relatively novel argument in an antitrust case and also used by the Dutch antitrust agency in a decision against Apple in 2021 in a case brought by dating app providers.

The EU competition enforcer said it added an additional lump sum of 1.8 billion euros to the basic amount as a deterrent to Apple and because a significant part of the harm caused by Apple's conduct was non-monetary. It did not say what the basic amount was.

“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store, " EU antitrust chief Margrethe Vestager said in a statement.

"They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem. This is illegal under EU antitrust rules," she said.

Apple criticised the EU decision, saying it would challenge it in court.

"The decision was reached despite the Commission's failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast," the company said in a statement.

"The primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden. Spotify has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation," it said.

It said the Swedish company pays no commission to Apple as it sells its subscriptions on its website and not on Apple's App Store.

Vestager's order to Apple to remove its App Store restrictions echoes the same requirement under new EU tech rules known as the Digital Markets Act (DMA) which Apple has to comply with on March 7.

Apple's fine, however, is about a quarter of the 8.25 billion euro fines the EU regulator meted out to Alphabet's Google in three cases in the previous decade.

In contrast to the music streaming case, 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, who subsequently sought feedback from rivals and users, will likely accept its offer without fining the company.

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