The European Union Imposes a $1.95 billion Fine on Apple

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Apple has been fined $1.95 billion by the European Union for allegedly restricting information about cheaper music streaming options from rivals like Spotify. The European Commission determined that Apple’s rules prevented users from being informed about more affordable subscription options available outside the iOS app.

Presently, if you purchase a subscription to a music streaming service through an iOS app, Apple receives a percentage of that subscription, potentially resulting in the highest possible cost for users. Additionally, users may miss out on more affordable options outside the app. The European Commission criticizes Apple for not allowing streaming services to inform users about cheaper alternatives available elsewhere and prohibiting companies from contacting users outside the app to share information about lower-cost offers.

Following an extensive investigation, the Commission imposed the fine on Apple and mandated that the company revise its regulations to enable streaming services to communicate with European customers about the availability of the most cost-effective subscription options. Competition Commissioner Margrethe Vestager commented, “For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store. They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem.”

The EU’s Competition Commission, known for imposing substantial fines on Silicon Valley firms, has targeted Apple for the first time. The Commission’s primary responsibility is to ensure that individuals across Europe are not unduly affected by the business strategies of major companies, preventing situations where they might pay more than necessary for streaming service subscriptions, among other concerns.

The rules established by Apple have been at the core of a prolonged complaint lodged by the streaming service Spotify. Spotify initially brought attention to Apple’s dominance by filing a complaint with the Competition Commission. Spotify asserts that Apple manages access to its customers via the company’s in-app purchase system, which enables Apple to collect a 30% share of these revenues. Consequently, Spotify does not provide the option to subscribe or upgrade to premium tiers within the app; users must visit the website for such transactions.

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