The European Commission fined Apple nearly $2 billion in an antitrust penalty over how the tech giant’s app store rules impacted the music streaming market, the commission announced Monday.
The 1.8 billion euro fine is the first issued by the European Union against the U.S.-based tech giant over antitrust violations. The penalty stems from a long-running investigation that started with a complaint by the music streaming company Spotify.
The ruling targets Apple’s so-called anti-steering provisions — rules imposed by Apple that prevent music streaming app developers from fully informing customers using Apple’s iOS operating system about alternative and cheaper subscription services available outside of their apps. Apple operates a music streaming app, Apple Music, which competes with Spotify.
The EU found Apple’s anti-steering provision amounts to “unfair trading conditions” and is “neither necessary nor appropriate” to protect Apple’s commercial interests. The rules instead “negatively affect the interests of iOS users,” the commission 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,” European Commission executive vice president Margrethe Vestager said in a statement.
Apple said it will appeal the decision, pushing back strongly on the allegations of anti-competitive behavior in a blog post.
Apple’s post highlights Spotify’s popularity as a streaming service in pushing back on the allegations. The tech giant said Sweden-based Spotify has a 56 percent share of Europe’s music streaming market.
Spotify in a statement cheered the decision as an “important moment in the fight for a more open internet for consumers,” adding that “we’re looking forward to the next steps that will hopefully clearly and conclusively address Apple’s long-standing unfair practices.”
The landmark fine for Apple released by the EU comes the same week that Europe’s new antitrust rules under the Digital Markets Act go into effect. The rules will force five companies deemed gatekeepers, including Apple, to adjust their rules to comply with the new competition standards.
As part of that rule, Apple has announced new app store rules, such as opening the iPhone to alternative app stores.
Companies not compliant with the new rules will be subject to hefty fines.
In addition to Apple, the list of gatekeepers also includes the U.S.-based companies Microsoft, Facebook owner Meta, Amazon, Google-owner Alphabet and Chinese-based TikTok owner ByteDance.