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A version of this story appeared in the daily Threat Status newsletter from The Washington Times. Click here to receive Threat Status delivered directly to your inbox each weekday.
The European Union’s top antitrust enforcer fined Apple nearly $2 billion on Monday, saying the American tech giant restricted customer access to information on competitors to benefit its music streaming services.
Apple expressed anger with the decision, the first EU antitrust ruling of its kind, claiming it appeared to be tailored to help a European online music rival, Spotify.
European Commission regulators said the Cupertino, California-based Apple abused its dominant market position to restrict app developers from informing people who used Apple’s IOS operating system of cheaper alternatives to the company’s music service.
The regulator said the illegal conduct lasted almost 10 years, resulting in users of iPhones and iPads paying far higher prices than the market competition would set.
“Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” Margrethe Vestager, the European Commission executive vice president who oversees competition policy, told a news conference in Brussels on Monday. “From now on, Apple will have to allow music streaming developers to communicate freely with their own users.”
Apple’s conduct was “neither necessary nor proportionate” to its need to protect its business from competitors, Ms. Vestager’s office said in a statement. The EU has emerged as a regulatory leader in dealing with the new kinds of antitrust challenges posed as so much of global commerce moves online.
Apple’s statement noted that Sweden-based Spotify is the “largest music streaming app in the world” and stands to be the biggest beneficiary of the EU regulator’s decision.
“The reality is that European consumers have more choices than ever,” Apple said in a statement on its website. “Ironically, in the name of competition, today’s decision just cements the dominant position of a successful European company that is the digital music market’s runaway leader.”
The company said “the facts simply don’t support this decision” and vowed to appeal the ruling.
The commission’s fine comes after an investigation triggered by a complaint from Spotify five years ago. EU officials have since crafted new regulations set to take effect this week to stop a handful of tech companies — largely U.S.-based — from dominating digital markets.
Apple complained that the European Commission reached its decision after meeting with Spotify 65 times during the investigation and then failing to uncover evidence of harm to consumers.
“Spotify has grown their company into the largest digital music business in the world,” Apple said. “They have a more than 50% share of the European market, and on IOS, Spotify has an even higher share than they do on Android.”
Spotify officials cheered the decision in a statement on the company’s blog.
“This decision sends a powerful message: No company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers,” Spotify said.
The European Commission said it objected to Apple allegedly blocking app developers from telling Apple’s users about subscription prices elsewhere online. The panel said Apple allegedly stopped developers from including links in their apps to websites for Apple’s competitors, where people could comparison-shop and perhaps purchase a rival product.
The regulator said it determined the fine of nearly $2 billion, because it was “proportionate to Apple’s global revenues and is necessary to achieve deterrence.”
• This story is based in part on wire service reports.
• Ryan Lovelace can be reached at rlovelace@washingtontimes.com.
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