Apple has claimed that the EU has failed for find any “credible evidence” that consumers have been harmed.
In a hard-hitting response to today’s fine, Apple also insists it has played a key role in Spotify’s success, saying Europe’s digital music market is thriving.
Apple also accuses the Swedish streaming company of working with the European Commission on “an investigation with little grounding in reality”.
The US tech company says:
Today, the European Commission announced a decision claiming the App Store has been a barrier to competition in the digital music market. 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 primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden. Spotify has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation.
Today, Spotify has a 56 percent share of Europe’s music streaming market — more than double their closest competitor’s — and pays Apple nothing for the services that have helped make them one of the most recognisable brands in the world. A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world.
We’re proud to play a key role supporting Spotify’s success — as we have for developers of all sizes, from the App Store’s earliest days.
Apple adds that the facts simply don’t support this decision, adding “as a result, Apple will appeal”.
Apple also accuses the EU of having tried to build “three different cases” against it. But each one, it claims, found no evidence of consumer harm or of anti-competitive behavior.
Apple says:
Eight years of investigations have never yielded a viable theory explaining how Apple has thwarted competition in a market that is so clearly thriving.
Apple has been fined €1.84bn by European authorities for stifling competition from rival music streaming services.
Margrethe Vestager, the bloc’s competition chief, said the tech giant had broken EU antitrust rules for a decade by “restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem”.
It is the first time the iPhone maker has been punished for breaching EU law. Apple has vowed to appeal, insisting it has created Europe’s thriving digital music market.
Vestager also revealed that most of the penalty – €1.8bn – was a punitive penalty added to make sure the level of the fine matched Apple’s financial strength, on top of a ‘traditional’ penalty of around €40m calculated under EU rules.
Spotify welcomed the decision, saying it sends a powerful message that no company can wield power abusively to control how other companies interact with their customers.
Back in the UK, there are reports that chancellor Jeremy Hunt is planning to extend the windfall levy on oil and gas firms for another year.
The energy profit levy (EPL) was introduced in May 2022 after the jump in energy prices following Russia’s invasion of Ukraine, which led to soaring profits for energy firms.
The levy, currently 35%, means the overall tax burden on North Sea oil and gas producers is 75%. It is due to expire in 2028.
But, Reuters reports that Hunt is expected to extend the levy by one more year to 2029 in Wednesday’s budget.
The tax rate, as well as a 29% investment allowance in the windfall tax that allows companies to offset spending, would remain unchanged, sources said.
In response to the fine, @Apple basically accused the Commission of favoring Sweden-based @Spotify, and made a point to call out how many times (65) the Commission met with its streaming rival during its investigation. (Reminder, Spotify is listed in the U.S.) https://t.co/d4XJ9urIXD
“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.” [referring to Spotify] $AAPL$SPOT
Higher than expected and “to ensure that the overall fine imposed on Apple is sufficiently deterrent.” Still, to put Apple’s fine of € 1,84 billion into perspective, here are quarterly revenues from services (which includes the App Store among others): https://t.co/kRXDh8RFTdpic.twitter.com/O7r35ITbuI
Apple Inc. was removed from Goldman Sachs Group Inc.’s list of top buys after underperformance in its stock amid concerns over weak demand for its key products.
The iPhone maker had ranked in the 20-25 member “Directors’ Cut” version of Goldman’s conviction list since it was unveiled last June. Its share price is little changed in that span while the S&P 500 Index has jumped almost 22%. Apple dropped 0.6% Friday after its removal from the list.
Apple (AAPL)
Apple stock was heading lower in premarket on Monday following a decline on Friday as Goldman Sachs cut it from its list of "top buys" following what it called "underperformance".
Spotify have hailed today’s fine, calling it “an important moment in the fight for a more open internet for consumers”.
Spotify says the European Commission has made it clear that Apple’s behaviour limiting communications to consumers is unlawful.
It adds:
This decision sends a powerful message — no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers.
Spotify argues thatthe foundational belief, that the internet should be a fair and open ecosystem, should still apply on mobile phones, saying:
Apple’s rules muzzled Spotify and other music streaming services from sharing with our users directly in our app about various benefits—denying us the ability to communicate with them about how to upgrade and the price of subscriptions, promotions, discounts, or numerous other perks. Of course, Apple Music, a competitor to these apps, is not barred from the same behaviour. By requiring Apple to stop its illegal conduct in the EU, the EC is putting consumers first. It is a basic concept of free markets—customers should know what options they have, and customers, not Apple, should decide what to buy, and where, when and how.
Apple has claimed that the EU has failed for find any “credible evidence” that consumers have been harmed.
In a hard-hitting response to today’s fine, Apple also insists it has played a key role in Spotify’s success, saying Europe’s digital music market is thriving.
Apple also accuses the Swedish streaming company of working with the European Commission on “an investigation with little grounding in reality”.
The US tech company says:
Today, the European Commission announced a decision claiming the App Store has been a barrier to competition in the digital music market. 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 primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden. Spotify has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation.
Today, Spotify has a 56 percent share of Europe’s music streaming market — more than double their closest competitor’s — and pays Apple nothing for the services that have helped make them one of the most recognisable brands in the world. A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world.
We’re proud to play a key role supporting Spotify’s success — as we have for developers of all sizes, from the App Store’s earliest days.
Apple adds that the facts simply don’t support this decision, adding “as a result, Apple will appeal”.
Apple also accuses the EU of having tried to build “three different cases” against it. But each one, it claims, found no evidence of consumer harm or of anti-competitive behavior.
Apple says:
Eight years of investigations have never yielded a viable theory explaining how Apple has thwarted competition in a market that is so clearly thriving.
Q: You’ve explained that European consumers have been ripped off for a decade, for as long as Spotify has existed. Will there be any conpensation paid?
Vesteger agrees that consumers have indeed paid too much, or not even been able to find what they were looking for, due to Apple’s anti-steering system.
She suggests consumers could have paid two or three euros per month more, because of the restrictions on music streaming apps’ abilities to tell consumers about cheaper offers outside the App Store.
However, it’s not within the framework of EU competition law to order compensation, she adds.
Q: Where does the money go?
The €1.84bn fine will go into the Commission’s budget, and eventually returned to member countries by lowering their budget contributions, Vesteger says (unless it is successfully appealed).
The lump sum portion of Apple’s fine is worth €1.8bn, Margrethe Vestager, underlining her point that without it, the penalty would have been very small.
The Apple fine would have been quite small, @vestager says, noting it would have been a mere parking ticket for a company that size.
So she ramped it up with a "lump sum" to make sure it was proportionate to a company that size.
Antitrust competition chief Margrethe Vestager is taking questions from reporters now.
Q: €1.8bn is a large amount – clearly you tried to get it to a level where people at the top of Apple pay attention. And have you penalised them for supplying inaccurate information, as today’s ruling suggests has occured?
Vestager says the fine has two elements, including a lump sum to ensure the penalty has enough weight.
She explains that the standard penalty from the EU’s usual guidelines only came to a level comparable to “a parking ticket”. So she has also turned to EU rules which allow a lump sum to be added, to create a deterrant.
It’s the first time this has occured in this sort of case, Vestager suggests, explaining that it has been used before in cartel cases.
The total fine is just 0.5% of Apple’s annual worldwide turnover, she adds.
Today’s €1.84bn fine reflects Apple’s financial power, and the harm its behaviour inflicted on millions of European users, Margrethe Vestager tells reporters in Brussels.
