BRUSSELS, Belgium – The European Union is expected to impose a fine of about €500 million on Apple Inc. as a result of an investigation into the company’s alleged suppression of music-streaming competitors on its platforms, particularly Spotify Technology SA. This penalty, which would be Apple’s first from the EU, is being set following findings that the tech giant violated competition rules by thwarting rival music services from informing users about cheaper alternatives outside of its App Store.
The European Commission’s decision comes as part of its ongoing efforts to challenge the dominance of Big Tech companies within the EU. Earlier, EU competition chief Margrethe Vestager imposed significant penalties on Alphabet Inc.’s Google and ordered Apple to repay €13 billion in alleged unfair tax breaks from Ireland.
The investigation into Apple’s App Store practices was initiated in response to a complaint from Spotify nearly four years ago. The music streaming company claimed that it was forced to raise the price of its monthly subscriptions in order to cover costs associated with Apple’s alleged stranglehold on the App Store operations. Apple, in a closed-door meeting with EU officials last year, asserted that it had already addressed any potential competition concerns stemming from Spotify’s complaint.
In addition to the fine related to its App Store, Apple is also expected to have its settlement proposal in the EU’s investigation into its tap-and-pay technology accepted. The company has reportedly offered to open up access to its near-field communication chip on iPhones to rival digital wallets as part of a 10-year agreement.
Looking ahead, Vestager is gearing up for the enforcement of the bloc’s new Digital Markets Act, which aims to prevent competition violations by tech firms before they become entrenched. The Act will introduce regulations against the most powerful firms favoring their own services over those of rivals, combining personal data across different services, and using data collected from third-party merchants to compete against them. It will also require these firms to allow users to download apps from rival platforms.
The decision of the European Union to fine Apple and the impending enforcement of the Digital Markets Act reflect the ongoing efforts to regulate and challenge the practices of major tech companies operating within the EU.