The European Union has fined tech giant Apple a staggering 1.84 billion euros ($2 billion) for breaching antitrust regulations by impeding competition among music streaming services through its App Store policies. This marks the first penalty ever imposed on Apple by the EU for such violations.
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The fine, which dwarfs initial estimations, includes a basic penalty of 40 million euros, significantly augmented by an additional deterrent sum – a move unprecedented in EU antitrust enforcement.
The European Commission’s investigation, prompted by a 2019 complaint from Swedish streaming service Spotify, found Apple guilty of restricting rivals like Spotify from informing users about alternative payment options outside of its App Store ecosystem.
Such practices, according to the Commission, create unfair trading conditions. This argument, though relatively novel in antitrust cases, was previously leveraged by the Dutch antitrust authority in a similar case against Apple in 2021 involving dating app providers. The Commission has instructed Apple to cease such restrictive practices immediately.
Apple To Appeal
Apple has announced its intention to appeal the decision, a move likely to prolong the legal battle for several years. In the interim, the tech giant is obliged to pay the fine and comply with the EU’s directives.
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Reacting to the news, Apple’s shares experienced a 3.2 per cent decline, settling at $173.88 on Monday afternoon, reported Reuters.
The imposed fine, nearly quadruple initial expectations, consists of a base amount of 40 million euros, dubbed by European Competition Commissioner Margarethe Vestager as a mere “parking ticket” for the company, alongside an additional deterrent of 1.8 billion euros. This total fine amounts to 0.5 per cent of Apple’s global turnover.
In response to the ruling, Apple issued a statement criticising the decision, asserting that it was made “despite the Commission’s failure to uncover any credible evidence of consumer harm,” and disregarded the dynamic nature of the market, which Apple claims is competitive and flourishing.
Apple further pointed out Spotify’s prominent role in advocating for the decision, highlighting the Swedish company’s numerous interactions with the European Commission throughout the investigation.
The legal battle between Apple and the EU underscores the growing scrutiny faced by tech giants regarding their business practices, particularly concerning competition and consumer choice.
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The outcome of Apple’s appeal, to be decided by the Luxembourg-based General Court, Europe’s second-highest legal authority, will be eagerly awaited by both parties involved and could potentially have significant ramifications for the tech industry as a whole.
