Israel EU prepares first antitrust fine against Apple over App Store competition concerns

The European Union is on the verge of imposing a landmark antitrust penalty on Apple Inc., coupled with restrictions against App Store practices deemed anti-competitive, as reported by the Financial Times.

Anticipated next month, the penalty is expected to be in the vicinity of €500 million ($539 million), based on information from unnamed sources referenced by the FT. Apple’s potential fine could have reached up to 10% of its global annual revenue. The investigation was triggered by a 2019 complaint from Spotify Technology SA of Sweden, arguing that Apple’s App Store policies forced them to increase their subscription fees to offset costs linked to Apple’s control over app operations. The European Commission targeted Apple’s anti-steering policies with formal allegations in February 2023, criticizing these rules as unnecessary and leading to inflated prices for consumers.

In a shift early 2022, Apple allowed Spotify and similar services to guide app users to web sign-ups for subscriptions, circumventing Apple’s up to 30% commission and offering users more options. However, Spotify contended in June that Apple’s modifications were superficial and that restrictive practices remained in place.

The EU commission, beyond addressing past infractions, has advanced comprehensive new regulations to preemptively tackle anti-competitive behaviors in the tech sector. The Digital Markets Act, set to be fully implemented by March 2024, establishes a clear framework of regulations for tech companies.