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Apple Gets $2 Bln EU Antitrust Fine In Spotify Case, Will Appeal

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Apple Gets $2 Bln EU Antitrust Fine In Spotify Case, Will Appeal

(CTN News) – On Monday, Brussels fined Apple (AAPL.O) 1.84 billion euros ($2 billion) for blocking Spotify (SPOT.N) and other music streaming services from informing users of alternative payment methods.

It was a 2019 complaint by Swedish music streaming service Spotify that prompted the European Commission’s decision.

Earlier this year, the Dutch antitrust agency used an argument against Apple in a case brought by dating app providers that Apple’s restrictions constituted unfair trading conditions.

In contrast, sources with knowledge of the case told Reuters they expected to receive a penalty of 500 million euros.

As a deterrent, it included 1.8 billion euros on top of 40 million euros – which European Competition Commissioner Margarethe Vestager described as ‘parking tickets’. Those 1.84 billion euros represent 0.5% of global turnover, she said.

A court challenge is being considered by Apple against the EU’s decision. It is likely that a decision will take several years to be reached by the General Court in Luxembourg, which is Europe’s second-highest court.

The EU order and fine will have to be paid by Apple until then.

In a statement, the company said: “Unfortunately, the Commission failed to uncover any credible evidence of consumer harm, and ignored the realities of a thriving, competitive, and growing market.”

During this investigation, Spotify has met with the European Commission more than 65 times, and is the biggest beneficiary of this decision. Spotify is based in Stockholm, Sweden, and has the largest music streaming app in the world.

COMMISSION IS HIGH

In this case, Vestager said the Commission added a lump sum as a deterrent to an antitrust fine for the first time. In a press conference, she said, “millions of European music streaming users were unaware of all the options they had.”

The high commission fee imposed on developers and passed on to consumers made consumers pay more for such services.

Apple was ordered by Vestager to remove the anti-steering provisions and refrain from future similar behavior.

Spotify does not pay Apple any commission since it sells its subscriptions on its own website rather than on Apple’s App Store.

According to Spotify, there are still issues in other areas due to the EU decision.

Despite the positive outcome of this case, Apple’s bad behavior towards developers in other markets around the world does not change as a result of the case, the company said.

Vestager’s order to remove its App Store restrictions echoes the Digital Markets Act (DMA) that must comply with by March 7. Nevertheless, Apple’s fine represents about a quarter of the 8.25 billion euro fine that Google (GOOGL.O) paid in three cases in the past decade.

By opening up its tap-and-go mobile payment systems to rivals, Apple is seeking to settle another EU antitrust investigation. Regulators in the EU will likely accept its offer without fining the company after seeking feedback from rivals and users.

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