Η Ευρωπαϊκή Επιτροπή imposed fined over 1,8 billion euros to Apple for abusing its dominant position in the market to distribute music streaming applications to users iPhone and iPad ("iOS users") through App Store of
In particular, the Commission found that the Apple, implemented restrictions on app developers, preventing them from updating them iOS users about alternative and cheaper music subscription services available outside the app ("anti-steering provisions"). This is illegal according to them EU antitrust rules.
The transgression
Η Apple, is currently the sole provider of one App Store where developers can distribute the apps to iOS Users across the European Economic Area ("EEA"). Apple controls every aspect of the iOS user experience and sets the terms and conditions that developers must adhere to in order to be present on the App Store and reach users iOS in the EEA.
The Commission's investigation found that Apple prohibits music streaming app developers from fully informing iOS users of alternative and cheaper music subscription services available outside the app and providing instructions on how to sign up for such offers.
In particular, anti-stealth provisions prohibit app developers from:
- Inform iOS users within their apps about the prices of subscription offers available online outside of the app.
- Informing iOS users within their apps about price differences between in-app subscriptions sold through Apple's in-app purchase mechanism and those available elsewhere.
Including links in their apps that direct iOS users to the app developer's website where alternative subscriptions can be purchased. App developers also couldn't contact their new users, for example via email, to let them know about alternative pricing options after they've created an account.
Today's ruling concludes that Apple's anti-steering provisions amount to unfair trading terms, in breach of Article 102(a) of the Treaty on the Functioning of the European Union ("TFEU"). These anti-address provisions are neither necessary nor proportionate to protect Apple's commercial interests in relation to the App Store on Apple's smart mobile devices and adversely affect the interests of iOS users , who cannot make informed and effective decisions about where and how to purchase music streaming subscriptions for use on their device.
Apple's conduct, which spanned nearly ten years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions due to the high commission Apple charged developers and passed on to consumers in the form of higher subscription prices for the same service at Apple App Store.
Additionally, Apple's anti-steering provisions led to non-monetary harm in the form of a degraded user experience: iOS users either had to engage in a cumbersome search before finding their way to relevant offers outside the app, or were never signed up for some service because they didn't find the right one themselves.
The fine
The fine was determined based on its guidelines Committee of 2006 for fines (see press release and MEMO).
In determining the amount of the fine, the Commission took into account the duration and seriousness of the infringement, as well as Apple's total turnover and capitalization. It also took into account that Apple submitted incorrect information as part of the administrative process.
In addition, the Commission decided to add to the basic amount of the fine an additional one lump sum of 1,8 billion euros to ensure that the total fine imposed on Apple is sufficiently dissuasive. This flat-rate fine was necessary in this case because a significant part of the damage caused by the infringement consists of non-pecuniary damage, which cannot be properly calculated according to the revenue-based methodology as set out in the Commission's guidelines for the 2006 fines.
In addition, the fine must be sufficient to deter Apple from repeating the present or similar infringement. and to prevent other companies of similar size and with similar resources from committing the same or similar infringement.
The Commission concluded that the total amount of the fine more than 1,8 billion euros it is commensurate with Apple's global revenue and is necessary to achieve deterrence.
The Commission also ordered Apple to rescind the anti-directive provisions and to refrain from repeating the infringement or from adopting practices with an equivalent object or effect in the future.
The background of the research
In June of 2020 , the Commission initiated formal procedures for its rules Apple, for app developers about distributing apps through it App Store. In April 2021, the Commission sent Apple a Statement of Objections, to which Apple responded on September 2021.
In February of 2023 the Commission replaced his statement of objections 2021 with another statement of objections clarifying the Commission's objections, to which Apple responded May of 2023.
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