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The EU Commission imposed a 1.8 billion euro competition fine on technology giant Apple. The US company is abusing its dominant position in the market by selling music streaming apps to iPhone and iPad users through its app store, a Brussels official said on Monday.
Apple has placed restrictions on app developers that prevent them from informing Apple users about other, cheaper music subscription services. “This is illegal under EU antitrust rules,” the Commission said.
long-standing dispute
Music streaming service Spotify and Apple have been arguing for years. The EU Commission had already criticized in 2021 that if an app is downloaded through Apple’s App Store, subscription sales in apps must be processed through Apple’s payment platform. The group retains 30 or 15 percent of the revenue.
Spotify thought it wasn’t fair that Apple was left with more money from its rival music service due to this tax on the same subscription price. Apple argues that the decision was made even though the Commission found no concrete evidence of harm to consumers. Much of Spotify’s success is thanks to the App Store.
Apple offered an alternative
Since the download platform’s launch in 2008, Apple has typically charged a 30 percent tax on revenue from digital items or services such as subscriptions. For subscriptions lasting more than a year, the commission drops to 15 percent, even for developers making less than a million dollars a year. According to Apple, Spotify does not pay Apple any money for selling subscriptions outside of the app.
Apple introduced alternatives for its app business in the EU in January. This includes reducing tax on sales of digital items and subscriptions through the in-house app store. Starting from the second year, the previous 30 percent and 15 percent in subscriptions will be 17 percent and 10 percent respectively.
EU remains strict
However, Apple emphasizes that this share should be collected regardless of which payment service the application developer uses. If an app uses Apple’s payment system, an additional three percent must be paid.
EU competition watchdogs have been scrutinizing American tech platforms for years. Billions of dollars in fines were imposed on Google alone. The commission also justified the current multibillion-dollar fine by saying that Apple had provided false information in the administrative procedure and that the amount was meant to be a deterrent. (SDA/wgr)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
