EU wants to punish Apple with huge fines – that’s what it’s all about

It would be a punishment of historical significance. The technology giant Apple is threatened with the first ever fine from the European Union (EU), and one of a painful amount. The technology giant Apple will have to pay 500 million euros to the EU, the Financial Times reports. The newspaper appeals to five anonymous people.

Apparently, an investigation by the European Commission has shown that Apple has violated competition rules. In concrete terms, the technology giant is said to have exploited its dominant market position with the App Store. The store’s rules would force iPhone users to use the store’s billing service. App developers would no longer be able to inform users about cheaper offers. This leads to “unfair trading conditions”.

Nervousness sets in

The multi-billion dollar music streaming market continues to grow and is accordingly highly competitive. Swedish market leader Spotify accounts for almost a third of the global market. And they don’t like Apple’s mentioned practices at all. The origin of the EU procedure is a formal complaint from Spotify from 2019.

The streaming giant recently tightened its tone towards competitor Apple. There is a certain nervousness among technology companies because the EU wants to take tougher action against the market power of large technology companies with the ‘Digital Markets Act’. The new rules will come into effect at the beginning of March.

At the end of January, Spotify boss Daniel Ek sharply criticized Apple’s plans to reorganize the App Store. Developers whose apps are installed more than a million times per year will now have to pay Apple 50 cents for each additional app install when their app is downloaded from the Apple Store. This was “a total farce” and “blackmail,” Ek explained.

The Spotify boss can be happy with the expected punishment from the EU. According to the Financial Times, the exact amount of the fine will be announced in early March. Both Apple and the European Commission declined to comment to the newspaper.

However, Apple referred to a statement from a year ago. In it, the technology company said it would address concerns while promoting competition. However, Apple described Spotify’s complaint as “unfounded.” Thanks to the App Store, Spotify has become the leading music streaming service across Europe.

The 500 million euro fine for Apple would be one of the highest in the company’s history. But given the billion-dollar profits, it should still be manageable: in fiscal 2023, the tech giant reported a profit of about $97 billion. The company also has the opportunity to challenge the findings.

He has done this successfully in the past. In 2020, Apple was fined 1.1 billion euros in France, also for alleged anti-competitive behavior. However, after appeal, the fine was reduced to 372 million euros.