Apple slams Spotify following €1.8bn fine over App Store ‘dominance’ in music streaming

Apple has been slapped with a €1.8 billion fine by The European Commission for “abusing its dominant position” in the market for the distribution of music streaming apps, including Spotify, via its App Store.

According to the Commission, Apple applied restrictions on app developers preventing them from informing iOS users about cheaper alternative subscription services outside the app.

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Illegal under the EU antitrust rules, the move comes as rival streaming service, Spotify, launched a formal complaint against the streaming giant, which dates back almost a decade, which Apple said it will appeal.

As a result of the fine, Apple will have to remove terms to prevent developers from informing subscribers about alternative subscription platforms.

The European Commission said Apple’s conduct may have resulted in many iOS users paying higher prices for streaming subscriptions due to the “high commission fee imposed by Apple on developers and passed on to consumers in the form of higher subscription prices for the same service on the Apple App Store”.

The European Commission’s Executive Vice-President in charge of competition policy, Margrethe Vestager, said: “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, so today we have fined Apple over €1.8 billion.”

However, Apple released a statement claiming that the biggest beneficiary of the ruling, Spotify, “has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation”.

“The decision 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,” Apple stated.

“That’s because Spotify – like many developers on the App Store – made a choice. Instead of selling subscriptions in their app, they sell them on their website and Apple doesn’t collect a commission on those purchases.”

“All told, the Spotify app has been downloaded, re-downloaded, or updated more than 119 billion times on Apple devices. It’s available on the App Store in over 160 countries spanning the globe. And there are many more ways Apple creates value for Spotify, at no cost to their company.”

“It takes continuous effort and a lot of investment for Apple to make the tools, the technology, and the marketplace that Spotify uses every day. We’ve even flown our engineers to Stockholm to help Spotify’s teams in person. The result is that when a user opens the Spotify app, listens to music on their commute, or asks Siri to play a song from their library, everything just works. And again — Spotify pays Apple nothing.”

Meanwhile, Spotify added that Apple’s “behaviour limiting communications to consumers is unlawful”.

In a statement, the streaming giant said: “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.

“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. By requiring Apple to stop its illegal conduct in the EU, the EC is putting consumers first. It is a basic concept of free markets – customers should know what options they have, and customers, not Apple, should decide what to buy, and where, when and how,” it concluded.

Originally Appeared Here

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About the Author: Rayne Chancer