The European Commission has fined Apple Inc (NASDAQ:AAPL, ETR:APC) €1.8 billion (£1.5 billion) for imposing anti-competitive practices that prevented Spotify and other music streaming services from directing users outside of its App Store ecosystem.
It marks the first time the tech giant has faced an antitrust penalty from the European Union stemming from a complaint lodged by Spotify in 2019.
The EU determined that Apple forced unfair trading conditions on music streamers, with Margrethe Vestager, the EU's antitrust chief, stating: "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. This is illegal under EU antitrust rules.”
The hefty antitrust fine comes against the backdrop of a broader dispute between Apple and Spotify over App Store fees and competition.
Spotify's 2019 complaint to the EU accused Apple of leveraging its 30% fee on in-app purchases to stifle competition and limit consumer choice, thereby giving its own service, Apple Music, an unfair advantage.
Apple has countered these claims by asserting its support for all developers, including Spotify, which it notes pays nothing for the services that have helped it grow globally.
No love lost
“Fundamentally, their complaint is about trying to get limitless access to all of Apple’s tools without paying anything for the value Apple provides,” Apple earlier stated.
“But free isn’t enough for Spotify,” said Apple in response to today's ruling. “They also want to rewrite the rules of the App Store — in a way that advantages them even more.
Apple argued the ruling "was reached despite the Commission's failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast”.
"The primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden. Spotify has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation," Apple stated.
With tensions heated up between the two tech giants, Apple also made its own accusations of market dominance against Spotify: “The reality is that European consumers have more choices than ever.
“Ironically, in the name of competition, today’s decision just cements the dominant position of a successful European company that is the digital music market’s runaway leader.”
Apple shares are expected to open 1.7% lower when US markets commence on Monday.
The Cupertino megacap recently ceded its number-one position as the world’s most valuable company to Microsoft Corporation.