Apple is confronted with a hefty $2 billion antitrust fine for allegedly breaching EU regulations.

Brussels fined Apple 1.84 billion euros ($2 billion) on Monday for stifling competition with music streaming rivals by restricting its App Store, the iPhone maker’s first punishment for breaking EU rules.

The basic fine of 40 million euros was inflated by the huge lump sum included as a deterrent – a first for competition authorities in the European Union.

Last year, the European Commission accused Apple of preventing Swedish streaming service Spotify and others from telling users about payment options outside of its App Store following Spotify’s complaint in 2019.

It said on Monday that Apple’s restrictions amounted to unfair trading conditions, a relatively new argument in an antitrust case, and was also used by the Dutch competition agency in a 2021 ruling against Apple in a case brought by dating app providers. It ordered it to cease such conduct.

Apple announced that it will appeal the decision. It will likely take several years to get a ruling from the Luxembourg-based General Court, Europe’s second-highest court. Until then, Apple must pay the fine and comply with the EU order.

Apple shares were down 3.2% at $173.88 on Monday afternoon.

The fine was almost four times larger than the 500 million euros sources familiar with the matter had told Reuters they expected the European Commission to impose on Apple.

It included a base portion of €40 million – described by European Competition Commissioner Margarethe Vestager as a “parking ticket” for the US tech giant – and an additional €1.8 billion slapped on as a deterrent. He said the €1.84 billion total is 0.5 percent of Apple’s global revenue.

Apple criticized the decision, saying in a statement that it was reached despite the commission’s failure to uncover credible evidence of consumer harm and ignores the realities of a thriving, competitive and fast-growing market.

“The primary advocate – and biggest beneficiary – of this decision is Spotify, a company based in Stockholm, Sweden. Spotify is the world’s largest music streaming app and has met with the European Commission more than 65 times during this investigation.

‘LEFT IN THE DARK’

“Millions of European music streaming users were left in the dark about all the options available,” Vestager told a press conference.

“And Apple’s anti-steering rules also made consumers pay more for such services because developers were charged a high premium that was passed on to consumers.”

Spotify welcomed the EU’s decision, but said there were other problems in other sectors.

“And while we’re glad this case delivers justice, it doesn’t solve Apple’s bad behavior toward developers beyond music streaming in other markets around the world,” the company said in a statement.

Although the fine is large, Apple can handle it without an immediate cash impact, said Ryan Reith, an analyst at technology and services firm IDC.

But he added: “I think this is another step in the ongoing process of breaking down some of the walled gardens that Apple has created around its ecosystem.”

Over the past decade, the EU regulator has fined Alphabet’s Google a total of 8.25 billion euros in three cases.

Vestager’s order for Apple to remove restrictions on the App Store echoes the same requirement of the EU’s new technical rules, known as the Digital Markets Act (DMA), which Apple must comply with on March 7.

Unlike in the music streaming case, Apple is seeking to settle another EU antitrust investigation by offering to open up its tap-to-play mobile payment systems to competitors.

EU regulators, who later asked for feedback from competitors and users, are likely to accept its offer without fines.