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The European Union (EU) fined Apple 1.8 billion euros (about 2.7 trillion won) for abuse of power in the music streaming service market. Apple became the first case after the Big Tech anti-monopoly law was implemented in Europe with the intention of keeping Big Tech under control.
According to Reuters on the 4th (local time), the European Commission decided to impose a fine of 1.8 billion euros on Apple in an antitrust lawsuit filed against Apple by the music streaming company Spotify. “For the past 10 years, Apple has abused its dominant market position for the distribution of music streaming apps through the App Store,” EU antitrust chief Margrethe Vestager, the EU’s chief deputy commissioner, said in a statement. “From now on, Apple is a music streaming developer.” “We need to allow users to communicate freely with their users,” he said.
Apple has allowed all apps used on its devices, such as iPhones and iPads, to be purchased through the Apple App Store only. In this process, a fee of up to 30% was collected as a so-called toll tax, which is Apple’s main source of income. Spotify also had to pay a 30% commission to Apple when users bought its apps from the Apple Store. However, in 2019, Spotify filed a lawsuit claiming that Apple’s policy interfered with fair service competition. Spotify argued that it must charge an additional 30% for all payment services, and that it is not fair competition as its competitor Apple Music deviates from this fee policy. When the problem arose, Apple allowed a way to bypass its App Store and enable users to subscribe and buy music services on the Spotify web, but it was criticized for having really low usability due to the complicated process. It is said that separate guidance was provided on the website and even guidance on this process was limited. As a result, the EU decided that Apple dominated the music service distribution market and implemented unfavorable policies against Spotify, its music streaming service competitor.
Apple said it would file an appeal against the EU’s decision. Apple said in a statement, “Spotify failed to provide sufficient evidence,” and criticized that “Spotify met with the European Commission 65 times during the investigation.” European authorities, who have not taken the lead in platform services, are said to be excluding Apple in order to benefit Spotify. Apple claimed last month that it had benefited from Spotify’s growth by attracting subscribers within its App Store ecosystem.
The EU will implement the Digital Markets Act (DMA) starting this month to punish big tech companies like Apple that give preferential treatment to their services. The goal is to prevent Big Tech from using its platform as a tool to discriminate against competitors and unfairly push out. If this is breached, a large fine of up to 10% of total global annual sales can be legally imposed. Accordingly, Apple took separate measures to allow third-party app markets other than the App Store only in Europe and to allow payment for services outside the App Store. A tech industry official said, “Europe, which has no way to keep big tech companies like Apple in check in the platform sector, is trying to solve the problem with strong regulations.”
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