Apple gets slapped with a $2B music-streaming antitrust fine in a big win for Spotify
Facin’ the music… European regulators ordered Apple to pay a $2B fine yesterday, saying the Apple Music owner suppressed competition in the music-streaming industry. After a multiyear investigation, the European Commission said it found that Apple had imposed illegal restrictions on app developers by blocking them from steering iOS users to subscription offerings outside the apps. The probe stemmed from a 2019 complaint filed by music-streaming leader Spotify. The Swedish company argued that Apple’s rules “muzzled” it from sharing discounts and promos through its iOS app.
Regulators say: From now on, Apple’ll have to allow all music-streaming services to communicate freely with their users — or risk a bigger fine worth as much as 10% of its turnover.
Apple said it’ll appeal the decision, which it said will primarily benefit Spotify, which wants “to access Apple's tools without paying anything.” Apple said it doesn’t get $$ from Spotify.
Apple’s gated App Store garden… is finally opening. Apple has touted its App Store ecosystem as a way for developers to reach its massive iPhone user base and generate trillions in sales. But many iOS developers still have to pay Apple a 15-to-30% fee on app purchases, which has become a sore spot. In January, Apple’s US App Store began allowing developers to link out to non-Apple payment platforms after a years-long courtroom battle royale against “Fortnite” maker Epic Games. The Epic ruling said that Apple can’t bar developers from steering users to off-app purchasing pages.
Consequences could be bigger than costs… This is Apple’s first fine for breaking EU rules, and the third largest dished out to a tech company by European regulators. While some critics say the $2B charge is just a “parking ticket” for a company worth $2T+, Apple’s appeal could take several years to be decided. Until then, it’ll have to pay up and make the changes to its biz model.