Apple's lawsuit failed to influence the EU's stance, and the sky high penalty was still born with great conflict.
On March 4th local time, the European Commission announced that it will impose a fine of over 1.8 billion euros on Apple for abusing its dominant position in the music streaming application distribution market.
The European Commission stated that imposing a fine of 1.8 billion euros could deter Apple. According to reporters, this is not the highest penalty in the history of the European Union. In 2018, the EU imposed a fine of 4.34 billion euros on Google under the pretext of antitrust.
Apple's punishment originated from allegations made by European streaming giant Spotify in 2019. The company claims that the operation of the Apple App Store (mainly related to a 30% commission rate) has forced the company to increase the price of subscription services. EU regulators immediately launched an investigation, and the current punishment is the judgment conclusion drawn by the organization.
After the official announcement, Apple quickly posted a lengthy statement on its official website, "Although we respect the European Commission, we must point out that this decision does not receive practical support. Therefore, Apple will appeal."
In fact, there were rumors of the EU imposing a single penalty on Apple as early as February. Apple had made a strong statement a few days ago, stating that the EU had no direct evidence to draw the conclusion that Apple had harmed consumer interests and hindered market competition.
At that time, an Apple spokesperson told Interface News reporters that the company hoped the European Commission could recognize the facts, end the investigation, and not take any punitive measures against Apple.
Obviously, the European Commission is unwilling to back down. In the aforementioned statement, the EU antitrust agency believes that Apple's restrictions on other streaming music service providers constitute unfair trading conditions. The basis is that Apple has an anti steering clause in the agreement signed with developers.
The so-called "anti bootstrap" clause refers to Apple's prohibition on developers from notifying iOS users of subscription preferences provided by the external Internet in the App, as well as the price difference between subscriptions in the App and subscriptions in other places.
In response, Apple stated that this is a common market behavior, which means that developers cannot use a platform to attract paying users, but avoid the platform when users actually need to pay.
Apple believes that Spotify and other music streaming services can market to consumers through channels such as email, social media, text messages, and online advertising. In addition, the payment method through the "Reader" app is also allowed under Apple's rules.
This is a concession made by Apple in March 2022, allowing "Reader" to provide users with external links for paid registration. This means that content platforms such as Spotify and Netflix can bypass Apple's own payment system's commission mechanism while complying with Apple's rules.
But Spotify is not satisfied with this. This company stated that Apple did not allow it to provide clearer off-site paid traffic within the app.
Apple provided a detailed discussion on Spotify and its relationship with the European Union in a lengthy article, aiming to clarify that the European streaming market has achieved free development and full competition in the past decade, with Spotify being the fastest growing platform and occupying the top spot in the market with an absolute advantage.
At the same time, Apple points out that Spotify is a beneficiary of the Apple ecosystem in expanding market size and revenue, but does not want to pay any fees for Apple other than developer projects.
Apple attempted to characterize the punishment, "Ironically, the decision announced today solidified a successful European company's leading position in the digital music market in the name of competition."
As of the close on March 4th, Apple's stock price fell 2.5% to $175.1, with a total market value of $2.7 trillion.