The European Commission has fined Apple [APPL:US] EUR1.84bn for antitrust violations linked to restrictions within its App Store, representing Apple’s first-ever penalty for breaching EU rules, as reported by Reuters on March 5. The penalty is an answer to a 2019 complaint made by Swedish music streaming service Spotify [SPOT:US], which accused Apple of hindering competitors from informing users about payment options beyond the App Store. The European competition commissioner, Margrethe Vestager, asserted that Apple’s restrictive rules left millions of European music streaming consumers unaware of all available options, including cheaper subscription ways outside of the app, potentially leading to additional charges. She also noted that the significant EUR1.84bn penalty acts as a ‘deterrent’ to discourage Apple and others from repeating such practices.

People familiar with the matter disclosed that the penalty is nearly four times higher than expected, showcasing the Commission’s resolve to crack down on tech companies abusing their market dominance. The regulator’s directive instructing Apple to remove its App Store restrictions accords with similar provisions outlined in the EU’s new Digital Markets Act (DMA), a set of rules aimed to regulate the power of big tech companies (digital gatekeepers) to make European digital markets more competitive. The DMA has set a deadline of March 7 for six designated gatekeepers, including Alphabet [GOOG:US], Amazon [AMZN:US], Apple, ByteDance, Meta [META:US], and Microsoft [MSFT:US], to comply with the new rules. Specifically, they must no longer favor their services over those of competitors and enable interoperability with rival services.

Sources:

https://www.reuters.com/technology/apple-hit-with-over-18-bln-euro-eu-antitrust-fine-spotify-case-2024-03-04/

https://www.bbc.co.uk/news/technology-68467752

https://ec.europa.eu/commission/presscorner/detail/en/ip_23_4328

https://www.weforum.org/agenda/2023/09/eu-digital-markets-act-big-tech/#:~:text=The%20European%20Union’s%20new%20Digital,significant%20fines%20for%20non%2Dcompliance.