EU hits Apple with $1.95 billion fine for blocking cheaper music streaming options | Trending Viral hub

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Apple is in trouble in the EU. On Monday, the European Competition Commission hit the company with a fine of 1.8 billion euros ($1.95 billion), after concluding that Apple was preventing people from being told they could pay less for streaming music services.

Currently, if you purchase a subscription to a music streaming service within a iOS app, Apple will take a cut of that subscription. As a result, you will likely be charged the maximum price and may not be able to take advantage of cheaper options that would be available outside of the app. But where the Commission takes issue with Apple’s rules is that the company prevents the streaming service you subscribe to from telling you that those cheaper options are available elsewhere. It also prohibits companies from following up with you outside of the app to tell you about cheaper alternative offers.

After a lengthy investigation, the Commission imposed the fine on Apple and demanded that Apple change its rules to allow streaming services to inform European customers where they can buy the cheapest subscription.

“For a decade, Apple abused its dominant position in the market for the distribution of streaming music applications through the App Store,” said Competition Commissioner Margrethe Vestager. “They did this by preventing developers from informing consumers about alternative, cheaper music services available outside of Apple’s ecosystem.”

The EU Competition Commission has a history of imposing huge fines on Silicon Valley companies (it previously fined Google and Meta billions of dollars at a time), but this is the first time the regulator has gone after Apple. A key part of the Commission’s work is to ensure that people across Europe are not disadvantaged in any way by the commercial maneuvers of big companies (paying more than necessary for subscriptions to streaming services, for example).

Apple’s rules have been the basis of a long-running complaint by streaming service Spotify, which was the first to raise the issue of Apple’s dominance with the Competition Commission. He believes that Apple controls access to its customers through the company’s in-app purchasing system, allowing Apple to keep a 30% cut of these profits. As a result, it does not offer the option to subscribe or upgrade to premium levels within the app; instead, you must go to the website.

“This decision sends a powerful message,” Spotify said. in a blog post following the Commission’s announcement. “No company, not even a monopoly like Apple, can abuse its power to control how other companies interact with their customers.”

Apple’s point of view

Apple, unsurprisingly, sees things very differently. The company preempted the Commission’s decision by issuing a statement and telling reporters, including CNET, in late February about what it sees as a cash grab by Spotify, which it says wants to make even more money through your iPhone app than what you currently earn. without paying anything to Apple. In Apple’s eyes, it is Spotify, not Apple, that is the dominant player in the European music market, with its Swedish rival currently holding more than 56% of streaming music subscriptions in the region.

“We are happy to support the success of all developers, including Spotify, which is the largest music streaming app in the world,” an Apple spokesperson said. “Spotify pays nothing to Apple for the services that have helped them create, update and share their app with Apple users in 160 countries around the world.”

Three phone screens showing Apple Music's Replay '24 listening summary

Apple doesn’t just set rules on third-party apps installed on its devices, like Spotify. It also runs Apple’s music streaming service.

The company also shared information about Spotify’s relationship with Apple, including the free developer tools and engineering support that the music streaming service depends on. Apple, which has your own Apple Music streaming service, insists that Spotify has only grown so successful thanks to this work, as well as the numerous free APIs that the streaming service leverages to work seamlessly across all Apple devices. Apple added that users have downloaded, redownloaded and updated the Spotify app 119 billion times in total on iOS devices.

“Basically, their complaint is about trying to get unlimited access to all of Apple’s tools without paying anything for the value that Apple offers,” the company spokesperson said.

Following the Competition Commission’s decision on Monday, Apple published a blog post saying that plans to appeal EU fine. It will argue that the Commission has not actually found any evidence of harm to people and that Spotify is using EU rules to reinforce its dominance. “Free is not enough for Spotify,” the company states in the blog post. “They also want to rewrite the rules of the App Store, in a way that benefits them even more.”

Spotify did not respond directly to Apple’s comments. In early March, Spotify published an open letter to the EU on an issue other than Apple, complaining about the company plans to meet with the starter Digital Markets Lawthat imply changes in rates.

Meanwhile, the Commission is looking beyond Apple and Spotify. What might seem like a simple battle between tech titans and tech titans actually encompasses many more players: smaller music streaming services like Soundcloud and Deezer, as well as mid-sized players like Amazon and YouTube.

The regulator’s priority is that consumers are not harmed by commercial strategies that deprive them of options or offer them worse treatment. As the battle inevitably plays out in the courts over the next few years, your ideal outcome is one that gives people choice as well as good value for money.



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