Apple to Appeal €1.8 Billion EU Fine for App Store Practices

The tech giant Apple is gearing up for a legal battle against the European Commission after being slapped with a hefty fine exceeding €1.8 billion. The European Union regulatory body has imposed the fine citing Apple’s abuse of its dominant position in the market for the distribution of music-streaming apps to iPhone and iPad users through its App Store.

The European Commission investigation revealed that Apple had implemented restrictive measures on app developers, preventing them from informing users of alternative and potentially cheaper music-subscription services available outside of the App Store ecosystem. These measures, known as ‘anti-steering provisions’, have been deemed illegal under EU competition regulations. The case was initiated following a complaint filed by Swedish company Spotify.

Margrethe Vestager, the Commissioner in charge of competition policy, stated, “For a decade, Apple abused its dominant position in the market for the distribution of music-streaming apps through the App Store.”

Related: Apple to Challenge EU’s Digital Markets Act, Contests App Store Inclusion

In response to the fine, Apple has announced its decision to appeal, arguing that the commission failed to present “any credible evidence of consumer harm”. Additionally, Apple emphasized that the European music streaming market was flourishing.

The European Commission’s investigation found Apple to be the sole provider of the App Store, which serves as the exclusive platform for developers to distribute their apps to iOS users within the European Economic Area (EEA). The commission noted that Apple’s control extended to every aspect of the iOS user experience, allowing it to dictate terms and conditions for developers seeking to reach iOS users.

According to the commission, Apple’s anti-steering provisions created unfair trading conditions, violating article 102(a) of the Treaty on the Functioning of the European Union. The regulatory body asserted that Apple’s practices might have led to inflated prices for music-streaming subscriptions due to the high commission fees imposed on developers, ultimately passed on to consumers.

Moreover, the commission highlighted that Apple’s provisions resulted in a compromised user experience, with iOS users either facing difficulties in discovering alternative offers outside the App Store or foregoing subscription services altogether.

Responding to the commission’s decision, Apple pointed out that the ruling came just before the implementation of the new Digital Markets Act (DMA). The company stated its intention to comply with the DMA, including revising the challenged rules. Apple criticized the commission’s timing, describing it as an attempt to enforce the DMA prematurely.

Source: Law Society