Apple, Meta, Google, ByteDance and the Digital Markets Act (DMA): Apple is the runaway leader of the European music streaming market
She said that Apple needs to allow users to find the apps they want, pay for them on any device they want, and use them on any device they want.
The DMA’s provisions are designed to prevent tech giants from the sort of behavior that’s at the heart of the Apple investigation. Apple has already revealed how it will comply, including allowing iPhone users in Europe to use app stores other than its own and enabling developers to offer alternative payment systems.
The Digital Markets Act, due to take effect Thursday, imposes a set of do’s and don’ts on “gatekeeper” companies including Apple, Meta, Google parent Alphabet, and TikTok parent ByteDance — under threat of hefty fines.
Apple was hit with a fine of 1.84 billion by European union antitrust regulators over its App Store rules, and was told it cannot stop music services from advertising cheaper subscription deals outside of Apple’s store. The news of the fine was reported previously by the Financial Times, and comes at a crucial time for apple as they prepare to change their app distribution rules.
This is against the law. And it has impacted millions of European consumers who were not able to make a free choice as to where, how and at what price to buy music streaming subscriptions,” Margrethe Vestager, the EU’s competition commissioner, said at a news conference in Brussels.
The Commission took into account the seriousness of the Apple case, as well as Apple’s turnover and market valuation, when setting the fine.
“The decision was reached despite the Commission’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast,” the company said in a statement.
It said that the EU move would benefit the company because it holds a large share of the European music streaming market and doesn’t pay Apple for using its App Store.
“Ironically, in the name of competition, today’s decision just cements the dominant position of a successful European company that is the digital music market’s runaway leader,” Apple said.
Over time, the commission’s investigation has homed in on App Store rules that prevent developers from telling their users about alternatives to Apple’s own payment options. In February of this year, the commission said that it thought Apple’s anti-steering obligations were unfair and that its App Store policies were not necessary.
The company’s last fiscal year ended in September, and Apple’s service division generated $85 billion in revenue.
Various legal and regulatory developments in the U.S as well as Europe that are threatening to undercut the Apple’s commissions from the App Store have been weighing on the company’s stock, which has fallen by 9% so far this year while the tech-driven Nasdaq composite index has gained 8%. Apple’s share price fell 2.5% on Monday in the US.
The EU focused on how Apple prevents app makers from telling their users about cheaper ways to pay for subscriptions that don’t involve going through an app.
Apple banned streaming services from telling their users about how much subscription costs outside of their app, and they also put links in their apps to pay for alternative subscriptions or even email users to tell them about different pricing options.
US courts have ruled that Apple has to allow developers to use other payment methods, as well as link them out to other payment methods, as a result of a lawsuit from the developer of “Fortnite”. But when Apple did start allowing developers to link out, it maintained that it would still take a cut of up to 27 percent from any digital purchases — a small reduction over its typical 30 percent rate. Apple’s critics called out the changes, with Spotify saying they showed that Apple “will stop at nothing to protect the profits they exact on the backs of developers and consumers under their app store monopoly.”
The European Commission is looking into Apple’s policies regarding its own wallet and payment services, as well as its App Store policies. As a result of the investigation, Apple has offered to let third-party mobile wallet and payment providers use the iPhone’s NFC feature for payments.
On Monday, Ek posted a video on X in which he described Apple as a threat to the open internet. “Apple has decided that they want to close down the internet and make it theirs and they view every single person using an iPhone to be their user, and that they should be able to dictate what that user experience should be,” he said. Ek also claimed Apple also wants to effectively levy a tax on Spotify while exempting its own music service, Apple Music.