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Ladybbird · 21-02-24, 10:22

Why is Apple Facing a €500 MIL Fine From EU Over Music Streaming?

After a complaint by Spotify European Commission will reportedly hand down punishment after Apple imposed ‘unfair trading conditions’

The Guardian 21 FEB 2024

Spotify argues that restrictions benefit the tech companys’ rival app, Apple Music. Apple is to be fined €500m (£427m) for allegedly hobbling rivals in the music streaming market.

Why is Apple facing a €500m fine from EU over music streaming?

After a complaint by Spotify European Commission will reportedly hand down punishment after Apple imposed ‘unfair trading conditions’

The Financial Times reported that the EU’s executive arm, the European Commission, will hand down the punishment after a long-running investigation.

Why does Apple face the prospect of a fine?

After a complaint by Spotify in 2019, the EU has been investigating Apple’s position in the music streaming app market. It has whittled down its investigation to focus on certain restrictions imposed on app developers by Apple. These restrictions prevent developers such as Spotify from telling iPhone and iPad users about cheaper music subscriptions that are available outside the App Store. Spotify argues that this benefits the tech company’s rival app, Apple Music.

The case is the latest example of legal wrangling over Apple’s App Store – a key digital gateway and source of complaint from companies that use it.

Spotify is a longstanding critic of Apple’s App Store rules, which include charging a 30% fee on apps and in-app purchases. Apple moved recently to meet some of those concerns, under pressure from the EU’s Digital Markets Act (DMA), by announcing that it will allow EU customers to download apps without going through its own store.

What does the EU think of Apples' behaviour?

The EU declined to comment. But it indicated it would punish Apple in February last year when it published a new statement of objections over the case, a formal step in which Brussels sets out its concerns about a company’s behaviour. The commission said it viewed the restrictions as “unfair trading conditions” that breach article 102 of the treaty on the functioning of the European Union – or in simpler terms, abuse of a dominant position in a specific market.

The commission said it was concerned that the restrictions prevent developers from “informing consumers about where and how to subscribe to streaming services at lower prices”.

What happens next?

The FT reported that the commission will announce the fine early next month. The maximum penalty a company can face for anti-competitive behaviour is capped at 10% of its global turnover. In the case of Apple, this points to a potential fine of $30bn (£24bn) although, according to the FT, the final figure will be substantially lower. Apple will also be able to appeal against any decision by the commission.

What do Apple and Spotify say?

Both declined to comment on Monday. Last year Apple said its store had helped Spotify become Europe’s top music streaming service and it hoped the commission would “end its pursuit of a complaint that has no merit”. According to the FT, that seems unlikely.

21-02-24, 10:22	#1
Ladybbird Join Date: Feb 2011 Posts: 47,753 Thanks: 27,668 Thanked 14,458 Times in 10,262 Posts Awards Showcase Total Awards: 8	Apple Facing a €500 MIL Fine From EU Over Music Streaming Why is Apple Facing a €500 MIL Fine From EU Over Music Streaming? After a complaint by Spotify European Commission will reportedly hand down punishment after Apple imposed ‘unfair trading conditions’ The Guardian 21 FEB 2024 Spotify argues that restrictions benefit the tech companys’ rival app, Apple Music. Apple is to be fined €500m (£427m) for allegedly hobbling rivals in the music streaming market. Why is Apple facing a €500m fine from EU over music streaming? After a complaint by Spotify European Commission will reportedly hand down punishment after Apple imposed ‘unfair trading conditions’ The Financial Times reported that the EU’s executive arm, the European Commission, will hand down the punishment after a long-running investigation. Why does Apple face the prospect of a fine? After a complaint by Spotify in 2019, the EU has been investigating Apple’s position in the music streaming app market. It has whittled down its investigation to focus on certain restrictions imposed on app developers by Apple. These restrictions prevent developers such as Spotify from telling iPhone and iPad users about cheaper music subscriptions that are available outside the App Store. Spotify argues that this benefits the tech company’s rival app, Apple Music. The case is the latest example of legal wrangling over Apple’s App Store – a key digital gateway and source of complaint from companies that use it. Spotify is a longstanding critic of Apple’s App Store rules, which include charging a 30% fee on apps and in-app purchases. Apple moved recently to meet some of those concerns, under pressure from the EU’s Digital Markets Act (DMA), by announcing that it will allow EU customers to download apps without going through its own store. What does the EU think of Apples' behaviour? The EU declined to comment. But it indicated it would punish Apple in February last year when it published a new statement of objections over the case, a formal step in which Brussels sets out its concerns about a company’s behaviour. The commission said it viewed the restrictions as “unfair trading conditions” that breach article 102 of the treaty on the functioning of the European Union – or in simpler terms, abuse of a dominant position in a specific market. The commission said it was concerned that the restrictions prevent developers from “informing consumers about where and how to subscribe to streaming services at lower prices”. What happens next? The FT reported that the commission will announce the fine early next month. The maximum penalty a company can face for anti-competitive behaviour is capped at 10% of its global turnover. In the case of Apple, this points to a potential fine of $30bn (£24bn) although, according to the FT, the final figure will be substantially lower. Apple will also be able to appeal against any decision by the commission. What do Apple and Spotify say? Both declined to comment on Monday. Last year Apple said its store had helped Spotify become Europe’s top music streaming service and it hoped the commission would “end its pursuit of a complaint that has no merit”. According to the FT, that seems unlikely.