Apple Slapped with $500M+ Fine by EU: Accused of Muting Spotify & Co. – What’s the Story?

Apple is set to receive a substantial fine of nearly EUR 500 million ($539 million or approximately Rs. 4,475 crore) from the European Union (EU) following an investigation into allegations that the tech giant stifled competition by silencing music-streaming rivals, including Spotify Technology SA, on its platforms.

This penalty, marking Apple’s first-ever fine from the EU, is expected after the EU watchdog found the company in violation of competition rules. The investigation revealed that Apple hindered rival music services from informing users about more affordable alternatives outside of its App Store.

In response to the impending fine, Apple referred to a previous statement asserting that the App Store had played a crucial role in Spotify becoming the top music streaming service across Europe. The European Commission declined to comment, and the Financial Times was the first to report on the anticipated fine.

EU competition chief Margrethe Vestager has been actively pursuing strategies to challenge the dominance of Big Tech within the bloc through fines and regulatory actions. She has previously imposed substantial penalties on Alphabet’s Google and ordered Apple to repay allegedly unfair tax breaks from Ireland.

Apple has faced pressure not only from the EU but also from individual member states. In 2020, the company was fined EUR 1.1 billion (roughly Rs. 9,842 crore) in France for anti-competitive behavior, with the total later reduced to EUR 372 million (roughly Rs. 3,328 crore) after an appeal.

The EU’s investigation into Apple’s App Store originated from a complaint filed by Spotify nearly four years ago, alleging that it was compelled to increase its monthly subscription prices due to Apple’s alleged control over the App Store.

In a separate probe, Apple is expected to have its settlement proposal accepted in the EU’s investigation into its tap-and-pay technology. The settlement involves Apple opening up access to its near-field communication chip on iPhones to rival digital wallets for a period of ten years.

As the EU gears up for the enforcement of the Digital Markets Act on March 7, Vestager is preparing to implement sweeping new rules aimed at preventing competition violations by tech firms before they can establish dominance. Under the Digital Markets Act, powerful firms will be prohibited from favoring their own services over rivals, combining personal data across services, and using data collected from third-party merchants to compete against them. Additionally, users will have the option to download apps from rival platforms.