March 4, 2024

The European Commission has imposed a fine of over €1.8 billion on tech giant Apple (AAPL) for violating EU antitrust rules. The Commission discovered that Apple has been abusing its dominant position in the market by restricting developers from informing users about cheaper music services available outside of the Apple ecosystem.

The restrictions, known as anti-steering provisions, were applied specifically to the distribution of music streaming apps via the App Store to iPhone and iPad users. These provisions include the ban on developers informing users about the prices of subscription offers available on the internet outside of the app, detailing price differences between in-app subscriptions sold through Apple’s in-app purchase mechanism and those available elsewhere, including links in their apps leading iOS users to the app developer’s website on which alternative subscriptions can be bought, and contacting their own newly acquired users to inform them about alternative pricing options.

These anti-competitive practices, which lasted for almost a decade, have been deemed illegal under EU antitrust rules. This has led to higher subscription prices for the same service on the Apple App Store and a degraded user experience for iOS users. Apple has been ordered to remove the anti-steering provisions and refrain from similar practices in the future.

The €1.8 billion fine was set according to the Commission’s 2006 Guidelines on fines, factoring in the severity and duration of the offence, Apple’s total turnover, and market capitalization. The Commission’s decision also accounted for incorrect information provided by Apple during the administrative procedure. An additional lump sum was added to ensure sufficient deterrence against similar future infringements by Apple or other companies of similar size and resources.

The case, filed under the number AT.40437, may still be brought before the courts of the Member States by any person or company affected by the anti-competitive behaviour, seeking damages.