Apple EU Penalty
The European Union is gearing up to levy its first-ever antitrust penalty against tech giant Apple, along with imposing restrictions on App Store rules that stifle competition, reports the Financial Times.
Sources familiar with the matter suggest that the anticipated fine could amount to around €500 million ($539 million) and is expected to be officially announced in the near future. Apple may be subject to a fine of up to 10% of its worldwide annual revenue.
Spotify’s Challenge Against App Store Rules
This development follows a comprehensive investigation initiated in response to Spotify’s complaint, accusing Apple of favoring its own music service, Apple Music, through its App Store policies.
The inquiry is delving into whether Apple has hindered apps from informing iPhone users about more cost-effective music subscription options outside of the App Store. The investigation was set in motion after Spotify formally lodged a complaint with regulators back in 2019.
EU’s Allegations and Ramifications
Insiders privy to the situation indicate that the European Commission is poised to declare Apple’s actions as illegal, breaching the EU’s competition regulations designed to promote a level playing field in the single market.
The Commission intends to prohibit Apple from preventing music services from offering users alternative, cheaper subscription options outside of the App Store.
Brussels is set to accuse Apple of abusing its dominant market position and implementing anti-competitive business practices against its rivals, deeming Apple’s terms as “unfair trading conditions.”
Noteworthy Regulatory Measures
This impending penalty signifies one of the most significant financial sanctions that the EU has imposed on major tech companies. Google has faced hefty fines totaling around €8 billion over the years, currently entangled in legal disputes.
Although Apple has not been previously fined for antitrust violations by the EU, it was slapped with a €1.1 billion penalty in France in 2020 for alleged anti-competitive behavior, later reduced to €372 million following an appeal.
Implications and Future Prospects
The EU’s forthcoming action against Apple rekindles the ongoing clash between Brussels and the tech giant, especially amidst the enforcement of new regulations aimed at fostering competition and supporting smaller tech players.
The Digital Markets Act mandates that gatekeepers like Apple, Amazon, and Google comply with stricter regulations, fostering competition by allowing rivals to promote their services more effectively.
Nevertheless, concerns linger regarding the pace at which competition is being enhanced, despite Brussels emphasizing that these changes require time to take full effect.