Europe could fine Apple €500 million over anticompetitive music streaming practices

[Alfonso Maruccia]

A hot potato: In 2019, Spotify filed a complaint with the European Union, alleging that Apple was stifling competition in the music streaming industry through its App Store payment policies. After five years, Brussels appears poised to take action against Cupertino for violating EU antitrust laws.

According to unnamed sources cited in a recent Financial Times report, the European Union is set to announce a €500 million fine (approximately $539 million) against Apple for its alleged anticompetitive practices. This penalty, marking the first-ever fine imposed by Europe on Cupertino, is expected to be made public early next month, as per the sources. The fine is a result of the European Commission's antitrust investigation into Apple's conduct in the streaming market.

Over the past five years, EU investigators scrutinized contractual restrictions imposed by Apple on app developers. The restrictions prevented third-party companies from informing customers about potentially cheaper alternatives to Apple Music, a practice that Spotify denounced in 2019. Apple eventually modified this policy in 2022 under regulatory pressure from Japan.

The report from Financial Times asserts that Apple's actions contravene Europe's competition laws, leading to the substantial fine. Cupertino will be required to alter its business practices in the EU, allowing third-party apps to offer competitive prices outside the App Store on iOS devices.

In 2023, the European Commission issued a preliminary Statement of Objections to Apple, accusing the company of abusing its dominant position. The Commission suggested that Cupertino could face a fine of up to 10 percent of its annual worldwide turnover, but the final ruling was still pending.

A €500 million penalty, compared to a potential $40 billion fine, seems a more favorable outcome for Apple. However, it's worth noting that last year, the company urged Brussels authorities to drop the case entirely. Both Apple and European representatives are refraining from commenting on the recent Financial Times rumors, while Spotify continues to criticize Apple's alleged predatory business practices.

Cupertino has recently announced adjustments to its App Store policies to comply with the EU's Digital Markets Act (DMA). Spotify CEO Daniel Ek characterized the new policies as "extortion," as Apple is now proposing a new fee for each individual download, along with a 17 percent "rent" for apps to be featured in the App Store. According to Ek, these conditions would render Spotify's business, serving 100 million users in Europe, "untenable."

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https://www.techspot.com/news/101941-europe-could-fine-apple-500-million-over-anticompetitive.html

 

[ferrellsl]

That's a slap on the wrist for a company the size of Apple.

 

[LemmingO]

"far-reaching consequences" not "overreaching consequences"

 

[NeghVar1]

That's a slap on the wrist for a company the size of Apple.

If a company is making more off the actions they are being fined for than the fine itself, then it is just a cost of business. Make the fine estimated gains from the action plus 10%. If you want the fines to affect them, make them bleed

 

[Endymio]

If a company is making more off the actions they are being fined for than the fine itself, then it is just a cost of business. Make the fine estimated gains from the action plus 10%. If you want the fines to affect them, make them bleed

That's just the point; they don't want US firms to stop. The EU prefers the free money, especially when consumers aren't truly being harmed. Honestly, it's rather outrageous to try to force a company to use its own platform to advertise its competitors ... but no one ever accused EU regulators of being scrupulous or ethical.

 

[RudyBob]

Europe could be so much. This is what they have been reduced to.

 

[tancabean]

That's just the point; they don't want US firms to stop. The EU prefers the free money, especially when consumers aren't truly being harmed. Honestly, it's rather outrageous to try to force a company to use its own platform to advertise its competitors ... but no one ever accused EU regulators of being scrupulous or ethical.

When platforms like Android, Windows, iOS etc become so dominant it’s easy to stifle competition and take advantage of consumers. You can argue that they built the platform and therefore have the right to do so but that will inevitably lead to higher prices and worse products. Hence regulation.

 

[Puiu]

That's just the point; they don't want US firms to stop. The EU prefers the free money, especially when consumers aren't truly being harmed. Honestly, it's rather outrageous to try to force a company to use its own platform to advertise its competitors ... but no one ever accused EU regulators of being scrupulous or ethical.

It's not outrageous at all when you control the platform and distribution method of your competitors. These laws exist for a good reason and saying that what Apple is doing doesn't "harm" consumers is an outright lie that even you don't believe.

If companies can't self-regulate then the EU must step in do its job. It's what we pay taxes for, to defend us, the consumers. The EU is doing the right thing.

 

[Thanthan]

That's just the point; they don't want US firms to stop. The EU prefers the free money, especially when consumers aren't truly being harmed. Honestly, it's rather outrageous to try to force a company to use its own platform to advertise its competitors ... but no one ever accused EU regulators of being scrupulous or ethical.

Only that’s a mischaracterisation of what’s happening… they’re not forcing apple to advertise for Spotify, they’re forcing them not to block competitors from advertising lower prices than apples products…

 

[toooooot]

If a company is making more off the actions they are being fined for than the fine itself, then it is just a cost of business. Make the fine estimated gains from the action plus 10%. If you want the fines to affect them, make them bleed

They are fined often and for a lot of reasons. The thing is that with their size of customer base, there are a lot of ways to do wrong (especially when they want most profit).
Serious punishments are for serious offenses like that tech Apple rejected to license for their apple watches and is now disabled.
I mean there are a ton of laws conserving digital world. And maybe, these companies will almost fully rely on AI lawyers to cruise around all the laws trying to not violate EU laws.

 

[McMurdeR]

The EU prefers the free money, especially when consumers aren't truly being harmed.

No one's going to fall for that gaslighting.

 

[Endymio]

It's not outrageous at all when you control the platform and distribution method of your competitors.

But Apple does no such thing. The market share of iOS in Europe is 21% -- far, far below the level of "control". Furthermore, the actual market segment of iTunes isn't the artificially generated "cell-phone streamed music" the EU fabricates, but also includes terrestrial and satellite radio, pre-recorded pre-purchased music, and all other forms of on-the-go entertainment.

the EU must step in do its job. It's what we pay taxes for, to defend us, the consumers.

Ah, the proletariat worker is being horrendously exploited, eh? Being forced at gunpoint to purchase that streaming music at a Euro a track?

Only that’s a mischaracterisation of what’s happening… they’re not forcing apple to advertise for Spotify, they’re forcing them not to block competitors from advertising lower prices than apples products…

Wrong on two counts. (1) Apple isn't blocking competitors from advertising lower prices (which is literally impossible). The EU is fining then from barring competitors from advertising on Apple's own platform. They're perfectly free to advertise outside Apple's own online store.

And the EU isn't "forcing" Apple to do anything. They're confiscating half a billion Euros. If this truly was about "protecting the consumer", they wouldn't have launched a years-long investigation and then extorted half a billion dollars. They would merely have passed a clear, unambiguous law or regulation specifying exactly what Apple (and other firms) must comply with. But writing vague statutes about what does and doesn't constitute "unfair" practices has allowed the EU to steal trillions of dollars so far. Why would they stop now?

 

[Endymio]

You can argue that [Apple] built the platform and therefore have the right to do so but that will inevitably lead to higher prices and worse products.

I'd truly love to hear you justify how consumers are being harmed by the lack of a "better product" to stream music than iTunes. Would this hypothetical product stream faster? More reliably? Perhaps allow you to search for songs by title, or create your own playlists?

In reality, these competitors compete only on price. But companies like Samsung and Apple succeed precisely because they spend enormous sums on marketing and advertising. A competitor who doesn't have these overhead costs can always offer a lower price. But for that competitor to then demand Apple pickup its advertising costs for it is truly outrageous.

 

[Puiu]

But Apple does no such thing. The market share of iOS in Europe is 21% -- far, far below the level of "control". Furthermore, the actual market segment of iTunes isn't the artificially generated "cell-phone streamed music" the EU fabricates, but also includes terrestrial and satellite radio, pre-recorded pre-purchased music, and all other forms of on-the-go entertainment.


Ah, the proletariat worker is being horrendously exploited, eh? Being forced at gunpoint to purchase that streaming music at a Euro a track?


Wrong on two counts. (1) Apple isn't blocking competitors from advertising lower prices (which is literally impossible). The EU is fining then from barring competitors from advertising on Apple's own platform. They're perfectly free to advertise outside Apple's own online store.

And the EU isn't "forcing" Apple to do anything. They're confiscating half a billion Euros. If this truly was about "protecting the consumer", they wouldn't have launched a years-long investigation and then extorted half a billion dollars. They would merely have passed a clear, unambiguous law or regulation specifying exactly what Apple (and other firms) must comply with. But writing vague statutes about what does and doesn't constitute "unfair" practices has allowed the EU to steal trillions of dollars so far. Why would they stop now?

21% is more than enough to be considered as a platform that can control competitors. and the number is wrong, Apple has over 33.4% of market share in Europe as of Jan 2024 and it was as high as 37.6% last year.

Mobile Operating System Market Share Europe | Statcounter Global Stats

This graph shows the market share of mobile operating systems in Europe based on over 5 billion monthly page views.

gs.statcounter.com

"Ah, the proletariat worker is being horrendously exploited, eh? Being forced at gunpoint to purchase that streaming music at a Euro a track?"

If you want to be exploited by large corporations then you are free to live somewhere in the US. Europe actually has good standards/legislation that protect consumers not the profit of multi-trillion $ companies. And not just consumers, but also employees. You do realise that you are making fun of something that is objectively better, right?

"Apple isn't blocking competitors from advertising lower prices (which is literally impossible)."

Your app will 100% be rejected if you tell the user of any payment method outside of the App Store. this is the problem. you are forced to not mention anything in the app which is beyond scummy, it's both anti-competitive and anti-consumer.

"And the EU isn't "forcing" Apple to do anything. They're confiscating half a billion Euros."

Except that they both forcing Apple to follow new rules and are also making Apple pay for breaking existing rules.

"They would merely have passed a clear, unambiguous law or regulation specifying exactly what Apple (and other firms) must comply with."

What you just said makes zero sense. the laws are clear enough, the fact that it took time to make a good case against Apple means doesn't mean the laws are bad, it just means that they did their due diligence. cases like this one involve much more than just lawyer A said X and lawyer B said Y. the paperwork alone can probably fill your home. and it's not like Apple didn't try to extend the time as much as they could.

TLDR: It isn't the EU that is stealing money, it is Apple. And you are here defending this company known for its anti-consumer and anti-competitive practices with some of the most weird arguments I've seen: the laws are bad, EU is evil and wants to steal money, consumers should not be protected by pro-consumer laws, Apple is too small, Apple can do whatever they want with their platform, etc etc.

 

[Endymio]

21% is more than enough to be considered as a platform that can control competitors.

How do you control the other 80%, pray tell?

and the number is wrong, Apple has over 33.4% of market share in Europe

No. Your figure is based off page views, which skews the data by web usage.

If you want to be exploited by large corporations then you are free to live somewhere in the US. Europe actually has good standards/legislation that protect consumers

So why are all your prices for everything so much higher than here in the US?

It isn't the EU that is stealing money, it is Apple.

Apple forced you to buy an iTunes track? How?

 

[Puiu]

How do you control the other 80%, pray tell?


No. Your figure is based off page views, which skews the data by web usage.


So why are all your prices for everything so much higher than here in the US?


Apple forced you to buy an iTunes track? How?

don't like the first link? here's another which is based on shipments:

Loading…

www.patentlyapple.com

"So why are all your prices for everything so much higher than here in the US?" - because of higher taxes and more expensive shipment costs, duh. do I need to explain economics 101 here and now? and you can add to that shitty prices from companies like Apple that just do 1 to 1 conversions from $ to euro -> this alone adds about 8% to the price.

"How do you control the other 80%, pray tell?" - because it is a big enough market share and as I've proved again, it's not just 20%. it is also known that Apple users have higher spending rates which increases the "control". again... economics 101.

"Apple forced you to buy an iTunes track? How?" - it's not about forcing me to buy iTunes, it's about forcing competitors to use their payment system and not allowing developers to inform users of alternatives when using the app. it seems that you really don't understand what being anti-competitive means and why they were fined.

 

[Endymio]

"So why are all your prices for everything so much higher than here in the US?" - because of higher taxes and more expensive shipment costs, duh

Oops! The price of locally-produced goods and services in Europe are far higher than here in the US. Germans pay five times as much for German-produced electricity as I do here, twice per sq. ft for German-made housing, nearly triple for German-made gasoline, and 50% higher for German taxi service. Worse for your argument is that most US consumer goods are produced in Asia: closer to Europe (and cheaper to ship to) than the US. And shipping digital goods and services is free.

The tax differential only accounts for a small fraction of this. Seems the EU's policy of "protecting the consumer" has backfired badly.

it's not about forcing me to buy iTunes, it's about forcing competitors to use their payment system and not allowing developers to inform users of alternatives

Falsely stated. Apple's competitors can use any payment system or method they wish. But when they're running on Apple's ecosystem, they must use Apple's payment system.
When I turn on my Mercedes' infotainment system, I don't see ads informing me that Toyota or Ford are cheaper alternatives. Why doesn't the EU protect me from Mercedes predatory business practices?

don't like the first link? here's another which is based on shipments:

I used the figure for existing phones, which is a more reliable metric than current shipments. In any case, whether the figure is 21% or 33% -- that's still far, far short of a monopoly share.

 

[Thanthan]

But Apple does no such thing. The market share of iOS in Europe is 21% -- far, far below the level of "control". Furthermore, the actual market segment of iTunes isn't the artificially generated "cell-phone streamed music" the EU fabricates, but also includes terrestrial and satellite radio, pre-recorded pre-purchased music, and all other forms of on-the-go entertainment.


Ah, the proletariat worker is being horrendously exploited, eh? Being forced at gunpoint to purchase that streaming music at a Euro a track?


Wrong on two counts. (1) Apple isn't blocking competitors from advertising lower prices (which is literally impossible). The EU is fining then from barring competitors from advertising on Apple's own platform. They're perfectly free to advertise outside Apple's own online store.

And the EU isn't "forcing" Apple to do anything. They're confiscating half a billion Euros. If this truly was about "protecting the consumer", they wouldn't have launched a years-long investigation and then extorted half a billion dollars. They would merely have passed a clear, unambiguous law or regulation specifying exactly what Apple (and other firms) must comply with. But writing vague statutes about what does and doesn't constitute "unfair" practices has allowed the EU to steal trillions of dollars so far. Why would they stop now?

Yes. They are fining a Company for abusing their monopoly power over a platform to bar other companies from advertising products that are in direct competition with apples own. If advertising apps in general was disallowed, I don’t think there’d be a problem, but if you allow advertisement at all, people should be allowed to advertise their product on platform, even if it is in direct competition to the platform owners product. Anything else creates an unfair advantage for the platform owner. An unfair advantage being any advantage that is entirely unrelated to the product sold. If you disagree with anti trust laws as a concept, you’re entitled to your opinion, but at least try to understand them before disparaging them… you clearly don’t. And let’s just say that… historically they’ve been a boon to economic growth rather than a hindrance. I think you’ll find that monopoly tends to result in stagnation.