Apple fined $2 billion for using app store to thwart competition

According to the report, Apple banned app developers from “fully informing iOS users about alternative and cheaper music subscription services outside of the app,” said the European Commission.

Under the EU antitrust rules, that is illegal. The report further states that Apple worked in this fashion for almost a decade, meaning many users paid ‘significantly higher prices for music streaming subscriptions,’ the commission said.

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The latest fine of $1.8 billion on Apple Inc by the EU arrived after a long-running investigation triggered by a complaint from Swedish streaming service Spotify five years ago.

Recently, to crack down on big tech companies, the EU has led global efforts that include a series of multibillion-dollar fines for Google and charging Meta with distorting the online classified ad market.

Apart from this, the EU also opened a separate antitrust investigation into Apple’s mobile payments service.

Initially, the commission’s probe centered on two concerns. One was the iPhone maker’s practice of forcing app developers who are selling digital content to use its in-house payment system, which charges a 30 percent commission on all subscriptions.

However, 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’t involve going through an app.

In that probe, the EU found Apple banned streaming services from telling users about how much subscription offers cost outside of their apps, which also included links in their apps to pay for alternative subscriptions or even emailing users to tell them about different pricing options.

The latest episode of imposing fine on Apple Inc. comes the same week the new EU rules are set to kick in, aimed at preventing tech companies from dominating digital markets.

Due to take effect Thursday, the Digital Markets Act imposes a set of do’s and don’ts on ‘gatekeeper’ companies including Apple, Meta, Google parent Alphabet, and TikTok parent ByteDance — under threat of hefty fines.

Meanwhile, Apple revealed how it will comply, including allowing iPhone users in Europe to use app stores other than its own and enabling developers to offer alternative payment systems.

The commission also has opened a separate antitrust investigation into Apple’s mobile payments service, and the company has promised to open up its tap-and-go mobile payment system to rivals to resolve it.

With agency inputs.

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Published: 04 Mar 2024, 05:53 PM IST