EU set to fine Apple 500 million euros in antitrust crackdown: Report

EU set to fine Apple 500 million euros in antitrust crackdown: Report

EU set to fine Apple 500 million euros in antitrust crackdown: Report

A. Perez Meca | Europa Press | Getty Images

The European Commission is set to fine Apple about 500 million euros ($539 million) over alleged breaches of EU competition law, the Financial Times reported on Sunday, citing unnamed sources with knowledge of the matter.

Brussels first launched an investigation into allegations that Apple hindered third-party music services on its devices and favored its own Apple Music service, after Spotify filed a formal complaint to regulators in 2019.

In most regions, Apple’s App Store rules prohibit companies such as Spotify from billing users for subscriptions directly within the app, making them instead use Apple’s App Store billing service, which takes a cut of up to 30%.

Brussels formally charged Apple in an anti-competitive probe in 2021, but narrowed the scope of the investigation last year, abandoning a charge of pushing developers to use its own in-app payment system.

The latest version of the probe focused on whether Apple had restricted apps from informing users about cheaper subscription alternatives outside of its native App Store and thus violated EU competition laws.

The findings of the investigation will lead to the Commission accusing Apple of abusing its powerful position and banning its “unfair trading conditions” regarding its music service subscription policies, sources told the FT.

If imposed, the fine would be one of the most substantial financial penalties the EU has imposed on a major technology company. It follows a series of large contested fines against Google.

While Apple has faced fines for antitrust behavior before — such as the €1.1 billion penalty in France that was later reduced to €372 million on appeal — this would mark its first such fine from Brussels.

Big tech preps for EU crackdown: Here's what you need to know

The reported fine is part of a broader crackdown in the EU and comes ahead of the enactment of the bloc’s landmark Digital Markets Act set for March. The new law aims to address anti-competitive practices from big tech players deemed as “gatekeepers,” including companies such as Apple, Amazon and Google.

Smaller internet firms and other tech businesses, such as Spotify, have long complained of being unfairly limited by these tech giant’s business practices.

In Apple’s case, the Digital Markets Act will require it to allow third-party developers to distribute apps outside the iOS Store and for those apps to bill their customers directly.

Apple has made moves to address EU regulations by announcing changes to its iOS, Safari and the App Store in the EU, and announced that it will soon allow software developers to distribute their apps to Apple devices via alternative stores.

In a separate antitrust case, the European Commission is looking into the way Apple restricts rivals from accessing its Apple Pay mobile system. Apple has already made concessions in relation to the case.

The timing of the Commission’s announcement on the fines has not yet been set, but that will not change the direction of the antitrust investigation, according to the FT report.

Apple has the right to appeal the decision in EU courts. The tech giant declined to comment on the report, referring CNBC to a previous statement that it was pleased regulators narrowed the focus of the probe.

Read the full report from the Financial Times.

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