THE EU COMMISSION has fined Apple €1.8 billion for “abusive App Store rules” that, over the last ten years, prevented customers from getting the best available price for music streaming services.
In a statement today, the Commission said: “Dominant companies have a special responsibility not to abuse their powerful market position by restricting competition”.
After an investigation by the Commission, it found that “Apple bans music streaming app developers from fully informing iOS (Apple) users about alternative and cheaper music subscription services available outside of the app”.
It also found Apple was preventing developers from “providing any instructions about how to subscribe to such offers”.
Apple’s infringement amounts to what EU law describes as “anti-steering provisions” which are designed to make sure customers pay subscriptions to music streaming services through the App Store, which make Apple more money.
The infringements, according to the EU, prohibit developers from informing customers about subscription prices found elsewhere on the internet, informing customers of price differences between in-app subscriptions and those elsewhere online and including links in their apps that would take customers to the developer’s website.
App developers were also prevented from contacting their own newly acquired users, for instance by email, to inform them about alternative pricing options after they set up an account, the Commission said.
“Apple’s conduct, which lasted for almost ten years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions because of the high commission fee imposed by Apple on developers and passed on to consumers in the form of higher subscription prices for the same service on the Apple App Store.”
The Commission said today’s decision concludes that “Apple’s anti-steering provisions amount to unfair trading conditions”, in breach of EU law.
It said the anti-steering provisions were “neither necessary nor proportionate for the protection of Apple’s commercial interests” and “negatively affect the interests of iOS users”, who it said “cannot make informed and effective decisions on where and how to purchase music streaming subscriptions for use on their device”.
In arriving at the €1.8 billion figure for the fine, the Commission said it factored in “the duration and gravity of the infringement as well as Apple’s total turnover and market capitalization”.
It also took into account the fact that Apple submitted “incorrect information” to the bloc.
“Any person or company affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages,” the Commission said.
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