Apple Hit With $2 Billion Fine by EU over App Store Restrictions

European regulators have levied their largest antitrust penalty to date against Apple, fining the tech giant $2 billion for abusing its dominance in the app marketplace and hindering fair competition. The penalty stems from a 2019 complaint filed by popular music streaming service Spotify, which has long argued Apple uses its control over the App Store to favor its own services.

Margrethe Vestager, Europe’s top antitrust enforcer, said Apple had imposed restrictive rules that forced streaming app developers like Spotify to use Apple’s payment system, resulting in a massive 30% tax on subscriptions purchased through the App Store. This ‘anti-steering’ provision prevented apps from informing users about cheaper payment options elsewhere. As a result, streaming prices for EU consumers were artificially inflated.

The $2 billion fine represents 4x what analysts had anticipated and is meant to deter similar behavior in the future. It comprises a baseline penalty of $47 million along with $1.95 billion in additional damages—equal to 0.5% of Apple’s worldwide revenue. Apple criticized the ruling, claiming the Commission failed to prove consumer harm from the App Store policies.

The penalty is the first of its kind for Apple but fits a pattern of EU intervention in the increasingly concentrated digital marketplace. In recent years, Google has been fined over $8 billion total for abusing its dominance in search and Android. The Commission is now pushing for new rules, like the Digital Markets Act, to rein in tech giants’ control over online ecosystems and level the playing field for competitors.

Apple will appeal the fine, a process that could take several years, but for now must change its App Store rules in Europe. The penalty is sizeable, but not devastating for Apple’s massive cash reserves. However, it indicates intensifying regulatory scrutiny that may force other changes to its tightly controlled app distribution model going forward.

Is the DMA Toothless? Apple Response Reignites Debate Over Tech Giant Power! Read Here