Apple is likely to face a fine of up to €500 million in the European Union over allegations that the company’s App Store policies had prevented users from finding cheaper alternatives to its music streaming app Apple Music, according to a report in the Financial Times. The fine is expected to be announced next month, according to unnamed sources cited in the report.
The investigation was started in 2020 after Swedish music streaming company Spotify filed an antitrust complaint with the European Commission in 2019, accusing Apple of trying to throttle competition on its App Store by "purposely limiting choice" and "stifling innovation" at the expense of the user experience.
“Apple is essentially acting as both a player and referee to deliberately disadvantage other app developers,” Spotify CEO Daniel Ek said in a blog post at that time.
In 2020, Apple was slapped with a $1.2 billion fine, which was later reduced to $366 million following an appeal.
Apple made changes to its EU App Store policy last month, complying with the Digital Markets Act (DMA) that came into effect in May 2023. Developers can now distribute iOS apps through alternative marketplaces, and pay a reduced commission of 10% for subscriptions after year one or 17% for digital goods/services transactions.
However, app developers including Spotify and Epic Games have called the new changes “misleading” and “malicious” after Apple introduced an additional fee of 3% on iOS apps if they use App Store’s payment processor.
Apple also added a new core technology fee of €0.50 for each first annual install per year on apps with over 1 million annual installs in the EU, whether they are downloaded from the App Store or third party app stores.
“Under the false pretense of compliance and concessions, they put forward a new plan that is a complete and total farce. Essentially, the old tax was rendered unacceptable under the DMA, so they created a new one masquerading as compliance with the law,” Spotify said in a blog post last month.
Apple has been under the scanner in several regions including the US for its App Store practices which many see as monopolistic and designed to maximize profit at the expense of developer and user interest.
In the US, Epic Games filed a lawsuit against Apple in August 2020 after its battle royale game Fortnite was banned from the App Store for offering links for third party payments in the game. In 2023, a US appeals court ruled that Apple’s practice was “anticompetitive” and “harmful” to consumers.
However, the court dismissed nine other antitrust allegations including the one related to 30% commission on in-app purchases and subscriptions. The court also rejected the argument that blocking third-party app stores was a violation of antitrust laws.