The European Commission has fined Apple over 1.8 billion euros ($2 billion) for abusing its dominant position in the market for the distribution of music streaming apps to iPhone and iPad iOS users through its App Store.
The Commission found that Apple applied restrictions on app developers preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the app which is illegal under EU antitrust rules.
This comes after Swedish music streaming giant Spotify complained in 2019 about this restriction and Apple's 30% App Store fees.
The Commission's investigation found that Apple bans music streaming app developers from fully informing iOS users about alternative and cheaper music subscription services available outside of the app and from providing any instructions about how to subscribe to such offers.
Apple is currently the sole provider of an App Store where developers can distribute their apps to iOS users throughout the European Economic Area. The Cupertino, California-based tech giant controls every aspect of the iOS user experience and sets the terms and conditions that developers need to abide by to be present on the App Store and be able to reach iOS users in Europe.
"Apple's conduct, which lasted for almost ten years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions because of the high commission fee imposed by Apple on developers and passed on to consumers in the form of higher subscription prices for the same service on the Apple App Store," the European Commission says.
"Apple's anti-steering provisions led to non-monetary harm in the form of a degraded user experience: iOS users either had to engage in a cumbersome search before they found their way to relevant offers outside the app, or they never subscribed to any service because they did not find the right one on their own," it adds.
"These anti-steering provisions are neither necessary nor proportionate for the protection of Apple's commercial interests in relation to the App Store on Apple's smart mobile devices and negatively affect the interests of iOS users, who cannot make informed and effective decisions on where and how to purchase music streaming subscriptions for use on their device," the Commission says.
In setting the level of the fine, the Commission took into account the duration and gravity of the infringement as well as Apple's total turnover and market capitalisation. It also factored in that Apple submitted incorrect information in the framework of the administrative procedure.
"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," says Margrethe Vestager, executive vice-president in charge of EU's competition policy.
