Apple has been fined over €1.8 billion for abusing its dominant market position in music distribution through the App Store. The European Commission (EC) found Apple’s practises illegal under EU antitrust rules.
“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store. They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem. This is illegal under EU antitrust rules, so today we have fined Apple over €1.8 billion.”
Margrethe Vestager, Executive Vice-President in charge of competition policy
Infringement
As the sole provider of an App Store for iOS, Apple controls every aspect of user experience. It sets the terms and conditions that developers must sign up to use its platform and reach iOS users. This includes a ban on music streaming app developers from:
- Informing iOS users within their apps about the prices of subscription offers available on the internet outside of the app.
- Informing iOS users within their apps about the price differences between in-app subscriptions sold through Apple’s in-app purchase mechanism and those available elsewhere.
- Including links in their apps leading iOS users to the app developer’s website on which alternative subscriptions can be bought. App developers were also prevented from contacting their newly acquired users, for instance, by email, to inform them about alternative pricing options after setting up an account.
Over the past ten years, iOS users have paid significantly higher prices for music streaming subscriptions because of the high commission fee imposed by Apple on developers.
Brexit
For UK consumers post-Brexit, the EC still has jurisdiction as the case commenced before the UK left the EU. The EU will apparently reimburse the UK for its share of the fine collected by the EU once the penalty has become definitive.
Comment
The penalty imposed by the EC does not prevent any individual or company affected from pursuing a claim for damages in the domestic courts nor reduce the value of any such claim.
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