LONDON (AP) 鈥� The European Union leveled its first antitrust penalty against Apple on Monday, fining the U.S. tech giant nearly $2 billion for by forbidding rivals like Spotify from telling users how they could pay for cheaper subscriptions outside of iPhone apps.
Apple muzzled streaming services from telling users about payment options available through their websites, which would avoid the 30% fee charged when people pay through apps downloaded with the iOS App Store, said the European Commission, the 27-nation bloc鈥檚 executive arm and top antitrust enforcer.
鈥淭his is illegal. And it has impacted millions of European consumers who were not able to make a free choice as to where, how and at what price to buy music streaming subscriptions,鈥� Margrethe Vestager, the EU's competition commissioner, said at a news conference in Brussels.
Apple 鈥� which contests the decision 鈥� behaved this way for a decade, resulting in "millions of people who have paid two, three euros more per month for their music streaming service than they would otherwise have had to pay," she said.
It's the culmination of a bitter, yearslong feud between Apple and Spotify over music streaming supremacy. A five years ago triggered the investigation that led to the 1.8 billion-euro ($1.95 billion) fine.
The decision comes the same week new rules take effect to prevent tech giants from cornering digital markets.
The EU has led global efforts to , including three totaling more than 8 billion euros, with distorting the online classified ad market and forcing its business practices.
Apple's fine is so high because it includes an extra lump sum to deter it from offending again or other tech companies from carrying out similar offenses, the commission said.
It's not the only penalty that the tech giant could face: Apple is still trying to resolve a separate EU antitrust investigation into its mobile payments service by promising to to rivals.
Apple hit back at the commission and Spotify, saying it would appeal Monday's fine.
鈥淭he decision was reached despite the Commission鈥檚 failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast,鈥� the company said in a statement.
It said Spotify stood to benefit from the EU's move, asserting that the Swedish streaming giant met over 65 times with the commission during the investigation, holds a 56% share of Europe鈥檚 music streaming market and doesn鈥檛 pay Apple for using its App Store.
鈥淚ronically, in the name of competition, today鈥檚 decision just cements the dominant position of a successful European company that is the digital music market鈥檚 runaway leader,鈥� Apple said.
Spotify said it welcomed the EU fine, without addressing Apple's accusations.
鈥淭his decision sends a powerful message 鈥� no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers,鈥� Spotify said in a blog post.
The commission's investigation initially centered on two concerns. One was the iPhone maker's practice of forcing app developers selling digital content to use its in-house payment system, which charges a 30% commission on all subscriptions.
But the EU later dropped that to focus on how Apple prevents app makers from telling their users about cheaper ways to pay for subscriptions that don鈥檛 involve going through an app.
The investigation found that Apple banned streaming services from telling users about how much subscription offers cost outside of their apps, putting links in their apps to pay for alternative subscriptions or even emailing users to tell them about different pricing options.
鈥淎s a result, millions of European music streaming users were left in the dark about all available options,鈥� Vestager said, adding that the commission's investigation found that just over 20% of consumers who would have signed up to Spotify's premium service didn't do so because of the restrictions.
The fine comes just before are set to kick in that are aimed at preventing tech companies from dominating digital markets.
The Digital Markets Act, due to take effect Thursday, imposes a set of do's and don'ts on 鈥済atekeeper鈥� companies including Apple, Meta, Google parent Alphabet, and TikTok parent ByteDance 鈥� under threat of hefty fines.
The DMA's provisions are designed to prevent tech giants from the sort of behavior that's at the heart of the Apple investigation. Apple has already revealed how it will comply, including other than its own and enabling developers to offer alternative payment systems.
Vestager warned that the commission would be carefully scrutinizing how Apple follows the new rules.
鈥淎pple will have to open its gates to its ecosystem to allow users to easily find the apps they want, pay for them in any way they want and use them on any device that they want," she said.
Kelvin Chan, The Associated Press
