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Margrethe Vestager, Vice-President of the European Commission and European Commissioner for Competition, aiming for a Europe fit for the digital age, speaks to the media at European Commission Headquarters Berlaymont in Brussels, Belgium, on February 8, 2024. . Thierry Monas/Getty Images
The European Union imposed its first antitrust penalty on Apple on Monday, charging the U.S. tech giant with nearly $2 billion in violations of European Union competition law for unfairly favoring its music streaming service over its competitors. imposed a fine.
The European Commission, the 27-nation bloc’s enforcement agency and top antitrust enforcer, said Apple is asking app developers to tell users where they can pay for cheaper music subscriptions instead of paying through their iOS apps. It is said that he was kept quiet from telling the truth.
“This is illegal and affects millions of European consumers who have been unable to make free choices about where, how and at what price they purchase their music streaming subscriptions. ,” EU Competition Commissioner Margrethe Vestager said at a press conference in Brussels.
Apple, which is appealing the decision, says it has been this way for 10 years, resulting in “millions of people paying a few euros more per month than they originally had to pay for music streaming services. “It happened,” she said.
The €1.8 billion fine follows an investigation that began five years ago following complaints from Swedish streaming service Spotify. Since then, the EU has drawn up new regulations to prevent tech giants from cornering the digital market, which will come into force this week.
The EU has led a global effort to crack down on Big Tech companies, including three fines against Google totaling more than €8 billion and charges against Meta for distorting the online classified advertising market.
Meanwhile, Apple is also resolving a separate EU antitrust investigation into its mobile payment services by pledging to open up its tap-and-go mobile payment system to competitors.
The reason the fine for the music streaming investigation is so high is because it includes a large additional lump sum to deter Apple from repeating the crime and to act as a deterrent for other tech companies to commit similar crimes. the committee said.
Apple fired back at both the commission and Spotify, saying it would appeal the fine.
“This decision, reached despite the European Commission’s failure to uncover any credible evidence of consumer harm, ignores the realities of a prosperous, competitive and rapidly growing market,” the company said in a statement. “I am doing so,” he said.
The report says Spotify stands to benefit from the EU move, as the Swedish streaming giant, which has a 56% share of Europe’s music streaming market and does not pay Apple for App Store usage, investigates. He claimed to have met with the committee more than 65 times during the period. .
“Ironically, today’s decision, in the name of competition, only cements the dominant position of a successful European company that is the runaway leader in the digital music market,” Apple said.
Spotify did not address Apple’s accusations, saying it welcomed the EU fine.
“This decision sends a powerful message: No company, even a monopoly like Apple, can abuse its power to control how other companies interact with their customers. “No,” Spotify said in a blog post.
The commission’s investigation initially focused on two concerns. One was the iPhone maker’s practice of forcing app developers selling digital content to use its payment system, which charges a 30% fee on all subscriptions.
But the EU later dropped the provision to focus on how Apple prevents app makers from telling users cheaper ways to pay for subscriptions outside of the app.
According to the study, Apple requires streaming services to notify users of the cost of subscription offers outside of the app (including in-app links to pay for alternative subscriptions) and to inform users about alternative pricing options. Even notification by e-mail was prohibited.
“As a result, millions of European music streaming users were left in the dark about the full range of options available to them,” Vestager said, adding that the commission’s investigation found that Spotify’s premium service They do so because of the added constraints that found that just over 20% of consumers who would have signed up did not.
The fines come just before new EU rules come into force aimed at preventing technology companies from dominating digital markets.
The Digital Markets Act, scheduled to come into force on Thursday, imposes a series of “do’s” and “don’ts” on “gatekeeper” companies such as Apple, Meta, Google parent Alphabet and TikTok parent ByteDance, leading to hefty fines. There is a risk of being fined.
The DMA’s provisions are intended to prevent big technology companies from engaging in the kind of behavior at the center of the Apple investigation. Apple has already made clear how it will respond, including allowing iPhone users in Europe to use app stores other than its own and allowing developers to offer alternative payment systems.
Vestager warned that the committee will closely scrutinize how Apple complies with the new rules.
“Apple will need to open the gates to its ecosystem to make it easy for users to find the apps they want, pay for them how they want, and use them on the devices they want,” she said. .
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