EU to hit Apple with unprecedented €500 mln fine

The European Union is close to striking Apple Inc. with its first ever antitrust fine as well as a ban on App Store rules that the bloc believes impede competition, the Financial Times reported on Sunday.

EU is expected to announce the fine – which amounts to around €500 million ($539 million) – next month, the Financial Times added, citing five informed sources on condition of anonymity. The U.S. tech giant could have been fined as much as 10 percent of its annual global sales.

The probe was sparked in 2019 when Sweden’s Spotify Technology SA filed a complaint, claiming it was forced to ramp up its monthly subscription price to cover costs associated with Apple’s alleged stranglehold on how the App Store operates. The European Commission homed in on Apple’s so-called anti-steering rules in a formal charge sheet in February 2023, stating that the conditions were unnecessary and meant customers faced higher prices.

In early 2022, Apple began enabling Spotify and other music services to direct app users to the web to sign up for subscriptions. This bypasses Apple’s revenue cut of as much as 30 per cent, giving consumers more pricing and subscription options. However, Spotify hit back at Apple’s efforts, announcing in June that the restrictions still existed and the changes were “just for show.”

The commission, the EU’s antitrust arm, has also pushed through sweeping new rules to head off competition violations by tech companies before they take root. The Digital Markets Act (DMA) comes into effect in March 2024, and lays out a series of dos and don’ts.

Under the DMA, it will be illegal for the most powerful firms to favour their own services over those of rivals.