A European Union antitrust violation of 1.84 billion euros ($2 billion) was levied against Apple on Monday. This is the company’s first ever antitrust charge, and it is primarily intended to serve as a deterrent. The fine was imposed because Apple prevented Spotify and other music streaming services from advertising payment methods that are not available via its App Store.
Spotify, a Swedish music streaming service, filed a protest in 2019 over this limitation and Apple’s thirty percent (30%) App Store fees, which ultimately led to the ruling being made by the European Commission.
Unprecedented $1.84 Billion Fine Against Apple by EU, Setting a New Precedent for Tech Giants
It was a somewhat innovative argument in an antitrust lawsuit, and it was also used by the Dutch antitrust agency in a verdict against Apple in 2021 in a case filed by dating app providers. The European Union enforcer said that Apple’s limits might be considered unfair market conditions.
Sources with knowledge of the situation told Reuters that they anticipated the Commission will impose a punishment on Apple that was far higher than the 500 million euros.
Apple was subjected to a total of 1.84 billion euros, which is equivalent to 0.5% of Apple’s global sales, as a consequence of the regulator’s decision to impose an extra lump amount of 1.8 billion euros as a deterrence to Apple and because a large portion of the damage caused by Apple’s behavior was non-monetary.
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A deterrent lump amount was added to an antitrust punishment for the very first time, according to EU antitrust head Margrethe Vestager, who said that this was the first time the Commission has done so.
According to a statement released by the European Union’s antitrust director Margrethe Vestager, “Apple violated its dominant position in the market for the distribution of music streaming apps through the App Store for a decade.”
“They were able to do this by preventing developers from alerting customers about substitute music services that are accessible outside of the Apple ecosystem and that are more affordable. She said that this violates the antitrust regulations of the European Union.
Vestager issued an order to Apple, instructing the company to delete the anti-steering elements and to desist from engaging in activities that are comparable in the future.
Apple had a negative reaction to the judgment made by the EU and said that it will contest it in court. The General Court, which is located in Luxembourg and is the second-highest court in Europe, is likely to make a decision after a number of years have passed. Until then, Apple will be required to pay the fee and comply with the ruling issued by the European Union.
“The decision was reached despite the Commission’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast,” the business said in a prepared statement.
“The corporation Spotify, which has its headquarters in Stockholm, Sweden, is the most prominent supporter of this move and the organisation that stands to benefit the most from it. According to the statement, Spotify has met with the European Commission more than sixty-five times throughout the course of this inquiry. Spotify is the company that has the biggest music streaming app in the world.
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According to the report, the Swedish firm does not pay any fee to Apple since it sells its memberships on its own website rather than via Apple’s own App Store.
Under the new European Union technology regulations known as the Digital Markets Act (DMA), which Apple is required to comply with on March 7, Vestager has issued an order to Apple to remove limitations that have been placed on its App Store.
The penalties that was handed down to Apple, on the other hand, is around one fifth of the 8.25 billion euro penalty that the European Union authority handed down to Alphabet’s Google in three separate instances over the next ten years.
Apple is attempting to resolve another EU antitrust inquiry by promising to open up its tap-and-go mobile payment systems to competitors. This is in contrast to the fact that the music streaming issue is currently being investigated.
There is a good chance that EU authorities would accept its offer without fining the corporation. They have subsequently solicited comments from competitors and consumers.
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