Apple hit with $2 billion EU antitrust fine in Spotify case
Apple hit with $2 billion EU antitrust fine in Spotify case
Penalty for breaching competition law is four times higher than forecast as Brussels looks to send message to tech firms
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Apple has been fined €1.8bn ($2bn) by the EU after an investigation found it had limited competition from music streaming services such as Spotify.
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The European competition commissioner, Margrethe Vestager, said a smaller fine would have been nothing more than the equivalent of a parking fine and the €1.8bn was designed to act as a deterrent against a repetition of such practices by Apple or others.
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“Apple’s rules ended up harming consumers. Critical information was withheld so that consumers could not effectively use or make informed choices. Some consumers may have paid more because they weren’t aware that they can pay less if they subscribed outside of the app,” Vestager said.
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Vestager said consumers may have paid two or three euros a month more for music streaming because of the lack of open competition. However, she conceded that the fine would not be distributed to customers who had been allegedly exploited but to individual member states.
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She said the fine represented 0.5% of Apple’s global turnover.
Apple: If the App Store helps your app facilitate a sale, we should get a cut.
Developers: Makes sense. So, if I don’t want to pay your finder’s fee, I have to let people download my app from my site?
Apple: Doing that isn’t secure. If you want people to download your app, you have to use our App Store, or an App Store that we’ve blessed.
Developers: Ok, so I avoid paying you if I use a different App Store?
Apple: 3rd party app stores must pay us a commission.
Developers: I don’t find your rules worth access to your user base. Luckily I have the option to release my app on other stores on Android, so I’ll simply do that.
Developer here.
I usually need to develop for iOS in North America, the UK, Japan, or any other country where iOS holds a bigger slice of the pie.
And even when I do release in the EU, where Android is king, the money that iOS users spend can be too tempting to ignore. They might be 1/3 of the users, but they might also spend more.
I say this as someone who has released a lot of e-commerce apps all over the globe and is close to the sales data.
Developers: I don’t find your rules worth access to your user base
What are you talking about? You really think Spotify is going to cancel their iPhone app? That's never going to happen.
Small developers can be android only (I'd even argue they should, since they don't have the resources to spread their engineering across multiple platforms). But no large established developer will limit their customer base to just Android users.
1.8 billion fine and that's only 0.5% of Apple's yearly revenue. That's insane.
Their writeup that they published makes them sound very petty and hurt however.
Fucking hell, that's reads like they are a kid at a playground that took all the toys and is mad that a parent forced them to share some toys with the other kids.
It's extremely embarrassing that a company of their size acts like this. Grow up.
Today, Spotify has a 56 percent share of Europe’s music streaming market — more than double their closest competitor’s — and pays Apple nothing for the services that have helped make them one of the most recognizable brands in the world. A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world.
Didn't expect this much lol
The European competition commissioner, Margrethe Vestager, said a smaller fine would have been nothing more than the equivalent of a parking fine and the €1.8bn was designed to act as a deterrent against a repetition of such practices by Apple or others.
Still a drop in the bucket for them (that sounds crazy just saying that) but def a step in the right direction.
Still a drop in the bucket for them
It's really not - this is something like two years of revenue for Apple Music in Europe.
Spotify is free to sue Apple in every other jurisdiction around the world. Imagine if Spotify wins the same amount of money in a couple hundred more countries? Anti-competition law is largely the same everywhere in the world and Apple has the same business practices everywhere, so Apple would lose the same lawsuit elsewhere. It could easily end up with hundreds of billions in damages and why wouldn't Spotify sue Apple in every country?
I bet Spotify and Apple are working as we speak to settle this dispute out of court with a settlement that applies globally — this one is only for the EU.
in a couple hundred more countries
There are only around 195 countries in the first place and the EU represents 27 of them. So I'm afraid there isn't a couple hundred more available to fine Apple.
EU not messing around no more
This is the best summary I could come up with:
The fine is nearly four times higher than expected as the European Commission attempts to show it will act decisively on tech companies who abuse their dominant position in the market for online services.
“Apple’s conduct, which lasted for almost 10 years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions,” the European Commission said in a statement.
The tech company disadvantaged users by restricting app developers from openly promoting cheaper music subscription services available outside the Apple “ecosystem” , the commission found.
Responding to the fine, Apple said: “The decision was reached despite the commission’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast.
“Today, Spotify has a 56% share of Europe’s music streaming market – more than double their closest competitor’s – and pays Apple nothing for the services that have helped make them one of the most recognisable brands in the world.
Max von Thun, the Europe director of the Open Markets Institute, which researches the impact of corporate monopolies, said the large fine “sets a positive precedent which the EU would do well to draw on in future enforcement actions against tech giants”.
The original article contains 842 words, the summary contains 207 words. Saved 75%. I'm a bot and I'm open source!
While we're on the subject, other Music apps (like iTunes or the old iPod app replacements) need to be able to become default music handling apps and totally default away from their dogshit AppleMusic app that takes every opportunity to let you know they prioritize subscribers and you're up against the current.
How much goes to those that were affected?
A big fat 0!
That depends on how you define who's affected. The fine is part of EUs budget and the fees paid by member states will be reduced by the same amount for next years budget. Every* member of the EU profits from this. And since anti competitive behaviour affects the entire market, the involved parties got compensated.
*Except perhaps apple users... And one might argue they're the ones affected. But it's also self-inflicted.
That's not true. The fine is part of EUs budget and the fees paid by member states will be reduced by the same amount for next years budget. Every member of the EU profits from this. Except perhaps apple users...