Apple Hit with Landmark $2 Billion EU Antitrust Fine

The bloc announced Monday that it was imposing the fine on Apple (AAPL) — its first-ever antitrust penalty on the US tech giant — for preventing rival music streaming services such as Spotify from telling iPhone users that they could find cheaper ways to subscribe outside of Apple’s app store, CNN reported. 

Margrethe Vestager, the EU’s competition and digital chief, said Apple had “abused its dominant position” as a distributor of music streaming apps, adding that, as a result, European consumers did not have “a free choice as to where, how and at what prices to buy music streaming subscriptions.”

“This is illegal and it has impacted millions of European consumers,” Vestager said at a press conference.

Apple currently bans app developers from fully informing the users of iOS — the operating system for iPhones and iPads — about cheaper music subscriptions available outside of the app, the European Commission, the EU’s executive arm, said in a statement. For example, developers are not allowed to inform iOS users about the price differences between in-app subscriptions and those available for the same streaming service on a website.

Apple responded that the European Commission’s decision had been reached despite “its 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 that app developers “compete on a level playing field” on Apple’s app store. It plans to appeal the fine.

The European Commission said it had added a lump sum of €1.8 billion ($1.95 billion) to a basic fine in an attempt to deter Apple, as well as other big tech companies, from violating its antitrust laws.

“If you are a company who’s dominant and you do something illegal, it will be punished,” said Vestager, adding that, by itself, the basic fine was equivalent to a “parking ticket” for Apple.

The total €1.84 billion fine amounts to 0.5% of Apple’s worldwide annual turnover, according to Vestager.