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EU slaps Apple with €1.95B fine for App Store monopoly

Apple is appealing against the decision, arguing that the Commission is trying to enforce new rules before they officially start.

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Image: KnowTechie

Apple has been hit with a huge fine of €1.95 billion by the European Commission, just days before new rules called the Digital Markets Act come into play, reports the Financial Times.

The reason they’re in trouble? iPhone owners will know the struggle, but for everyone else, Apple was found to be too controlling on its iOS App Store.

Specifically, the company doesn’t let app developers like Spotify tell users about cheaper way to subscribe to their service, at least not through Apple’s own system.

A good example of this is with Amazon’s Kindle app. Amazon Kindle app users cannot directly purchase e-books from the app without going through Apple’s payment system first. Which means users may not have access to potentially cheaper e-book purchases available directly through Amazon.

This whole situation kicked off because of a complaint by Spotify. They were unhappy with Apple taking a 30% cut on subscriptions and also stopping them from letting users know about potentially cheaper deals outside the App Store.

The European Commission decided this was not fair, saying that Apple’s rules were against the competition laws, even before the new Digital Markets Act. Per the press release:

“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. Moreover, 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.”

Apple didn’t take this lying down.

They’ve decided to appeal against the decision. Also, they threw a bit of shade at Spotify in their own press release, published shortly after the EU Commission’s decision, pointing out how often Spotify has been downloaded or updated on Apple devices without paying Apple anything in return.

Apple argues that the Commission is jumping the gun, trying to enforce new rules before they officially start. Per Apple’s press release:

“The primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden. Spotify has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation.”

So what’s next? Well, it’s a bit of a waiting game to see how Apple’s appeal goes and what happens when the Digital Markets Act officially kicks in. There’s likely more drama ahead as everyone tries to adjust to the new regulations.

Who’s side are you on? Apple’s or Spotify? Drop us a line below in the comments, or carry the discussion to our Twitter or Facebook.

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Kevin is KnowTechie's founder and executive editor. With over 15 years of blogging experience in the tech industry, Kevin has transformed what was once a passion project into a full-blown tech news publication. Shoot him an email at kevin@knowtechie.com or find him on Mastodon or Post.

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