Apple fined 1.8 billion euros by EU for antitrust violations in Spotify case

On Monday, Apple received its first-ever EU antitrust fine of more than 1.8 billion euros ($1.95 billion) for blocking Spotify and other music streaming services from sharing alternative payment options with users outside of its App Store.

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

The European Union’s competition watchdog said Apple’s restrictions were unfair trading conditions, a relatively new argument in a cartel case, and was also used by the Dutch competition agency in a 2021 ruling against Apple in a case brought by dating app providers.

The EU competition authority said it added a 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 operations was not monetary. It did not state the base amount.

“For a decade, Apple abused its dominant position in the distribution market for music streaming applications 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 the Apple ecosystem. This is illegal under EU competition rules,” he said.

Apple criticized the EU’s decision and said it would take it to court.

“The decision was made despite the Commission’s failure to uncover credible evidence of harm to consumers and ignores the realities of a thriving, competitive and fast-growing market,” the company said in a statement.

“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,” it said.

It said the Swedish company does not pay Apple commissions because it sells its subscriptions on its website and not in Apple’s App Store.

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.

However, Apple’s fine is about a quarter of the 8.25 billion euros the EU regulator imposed on Alphabet’s Google in three cases over the previous decade.

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.