EU Antitrust Order Looms Over Apple in App Store Dispute with Spotify

Apple Stock

Apple Inc. (NASDAQ:AAPL) is set to receive an EU antitrust order, accompanied by a potential fine and a ban on alleged App Store rules used to hinder music-streaming competitors, marking the European Union’s latest regulatory action against major tech companies.

The decision, expected early next year, aims to prevent Apple from blocking music services on the App Store from directing users to alternative subscription options. As part of the decision, Apple could face a fine of up to 10% of its annual sales, though EU penalties often fall below this level, and regulatory orders to change business models can have more significant impacts.

The investigation was initiated nearly four years ago following a complaint from Spotify Technology SA, claiming that Apple’s App Store practices forced it to raise subscription prices to cover costs associated with Apple’s control over the platform. In February, the European Commission formally charged Apple for its anti-steering rules, deeming them unnecessary and potentially resulting in higher costs for customers.

This regulatory scrutiny aligns with the EU’s broader focus on App Store rules and another ongoing investigation into Apple’s control of tap-to-pay technology on its devices. While Apple is reportedly in talks to settle the tap-to-pay case, the App Store dispute continues to unfold.

This week, in a similar vein, jurors in the U.S. found Google to unfairly wield monopoly power, a victory for Epic Games Inc., the maker of Fortnite, which has also raised concerns about Apple’s App Store policies.

Margrethe Vestager, the EU’s antitrust chief, has a history of challenging Silicon Valley giants, having imposed fines on Google and ordering Apple to repay alleged unfair tax breaks. The European Commission declined to comment on the recent developments, and Apple has not provided an immediate response to inquiries from Bloomberg.

Beyond addressing past abuses, the EU Commission has introduced new rules to proactively address competition concerns in the tech industry. The Digital Markets Act (DMA), scheduled to take effect in March 2024, prohibits powerful firms from favoring their services, combining personal data across services, using third-party merchant data to compete against them, and restricting app downloads to rival platforms. Apple, along with Meta Platforms Inc. and ByteDance Ltd., has sought a review by EU courts to determine if some of their services fall under the DMA’s scope, challenging the impact on their business models.

Featured Image: Pexels

Please See Disclaimer

About the author: I am a writer and an editor with experience in publishing, research, and SEO strategies. I have an honors BSc in Social Work from the University of Benin, Nigeria.