Brussels, Belgium – The European Commission is preparing to impose a hefty fine of about 500 million euros ($539 million) on Apple over alleged violations of EU competition laws. According to sources familiar with the matter, the fine is a result of an investigation launched after a formal complaint by Spotify in 2019, which accused Apple of obstructing third-party music services on its devices and favoring its own Apple Music service.
One of the main points of contention is Apple’s App Store rules, which prohibit companies like Spotify from directly billing users for subscriptions within the app. Instead, they are required to use Apple’s App Store billing service, which takes a significant cut of up to 30%. The investigation also focused on whether Apple had restricted apps from informing users about cheaper subscription alternatives outside of its native App Store, violating EU competition laws.
If imposed, this would be one of the most substantial financial penalties the EU has imposed on a major technology company. The reported fine comes as part of a broader crackdown in the EU ahead of the enactment of the bloc’s landmark Digital Markets Act in March, which aims to address anti-competitive practices from big tech players, including Apple, Amazon, and Google.
The new law will require Apple to allow third-party developers to distribute apps outside the iOS Store and for those apps to bill their customers directly, addressing long-standing complaints from smaller internet firms and other tech businesses, such as Spotify, who have felt unfairly limited by the business practices of tech giants.
Apple has taken steps to address EU regulations by announcing changes to its iOS, Safari, and the App Store in the EU, as well as allowing software developers to distribute their apps to Apple devices via alternative stores. However, this is not the only antitrust case Apple is facing in the EU, as the European Commission is also examining the way Apple restricts rivals from accessing its Apple Pay mobile system.
The timing of the Commission’s announcement on the fines has not yet been set, but that will not change the direction of the antitrust investigation, according to the report. Apple has the right to appeal the decision in EU courts, and the tech giant declined to comment on the report, referring to a previous statement expressing its satisfaction with the narrowed focus of the probe.
The potential fine on Apple reflects the broader shift in the EU towards addressing anti-competitive practices from major tech players, and it sets the stage for further scrutiny as the Digital Markets Act comes into effect.