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The Commission argues that these so-called anti-steering provisions amounted to unfair trading conditions in breach of EU laws for nearly a decade.
The European Commission has fined Apple more than €1.8bn for what it calls anti-steering provisions that restricted developers from informing iOS users of alternative music subscription options available outside the App Store, breaking EU antitrust laws.
“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” Margrethe Vestager, head of EU competition policy, said in a statement today (4 March).
“It has impacted millions of European consumers, who were not able to make a free choice as to where, how and at what price to buy music streaming subscriptions.”
The Commission argues that these so-called anti-steering provisions amount to unfair trading conditions in breach of Article 102(a) of the Treaty on the Functioning of the European Union.
It said that the tactic incorporated by the iPhone maker is “neither necessary nor proportionate” for the protection of Apple’s commercial interests in relation to the App Store on Apple’s smart mobile devices.
The Commission also said it “negatively affect[s]” the interests of iOS users, who cannot make informed and effective decisions on where and how to purchase music streaming subscriptions for use on their device.
Under Apple’s system, it would charge music streaming services a 30pc fee on subscriptions signed up for in the music app. The music streaming service would pass on this cost to the user so the in-app subscription would get more expensive.
“One might think that this is a pretty straightforward case of consumer choice: the user can either use Apple’s in-app purchasing services and pay the additional 30pc. Or the consumer can choose not to pay for those services and subscribe through the internet without paying the fee. Exercising this choice is exactly what Apple made more difficult with its so-called ‘anti-steering rules’,” Vestager explained.
Other than the hefty fine, the Commission has also ordered Apple to remove the anti-steering provisions and to refrain from similar practices in the future.
“From now on, Apple will have to allow music streaming developers to communicate freely with their own users, be it within the app, or by email, or any other way of communicating. Now, it is of fundamental importance to hold companies like Apple accountable for their violations of EU law,” she went on.
“If Apple abuses its dominant position, we will detect such illegal behaviour, we will bring it to an end and we will punish Apple for it.”
The antitrust investigation was launched after Spotify issued a formal complaint to the European Commission in 2019. Spotify claimed that Apple engaged in practices such as limiting the streaming service’s communications with customers and preventing Spotify from sending emails to customers who use Apple.
“This decision sends a powerful message – no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers,” Spotify wrote in a response to the ruling.
“Apple’s rules muzzled Spotify and other music streaming services from sharing with our users directly in our app about various benefits – denying us the ability to communicate with them about how to upgrade and the price of subscriptions, promotions, discounts or numerous other perks. Of course, Apple Music, a competitor to these apps, is not barred from the same behaviour.”
Apple said it will appeal the decision because it believes the Commission failed to “uncover any credible evidence” of consumer harm or anticompetitive behaviour.
In recent months, Apple has taken steps to comply with the EU’s competition rules, including an announcement that it would allow EU users to download apps from competing app stores on iOS. However, these measures have been criticised by a number of companies, including Spotify and Epic Games.
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