The European Commissioner for Competition, Margrethe Vestager, announced, on Monday 4 March, that following its investigation and two statements of objections (see EUROPE 12710/1), the European Commission concluded that Apple had abused its dominant position on the market for the distribution of music streaming apps to iPhone and iPad users (‘iOS users’) through its App Store. The European Commission has therefore imposed a fine of €1.84 billion on the multinational company Apple.
In the iOS system, users have access to apps and developers distribute their apps via the App Store.
However, if the consumer subscribes to a music streaming application via the App Store (if the developer authorises this type of subscription in the App Store), Apple will charge the music streaming service a commission of 30% on each euro paid by the subscriber. This commission was then passed on by the supplier to the customer.
However, there is a second option for consumers. Subscribers can take out a subscription via the music streaming service provider’s website and use the subscription in the iOS app. Under the rules governing multiple players and platforms, Apple does not charge a commission, and consumers are also exempt.
The Commission concluded that Apple was subjecting developers to “anti-steering” provisions that prevented consumers from making an informed choice.
On the one hand, Apple prohibited the developers of these apps from informing iOS users of the existence of other music subscription services available outside the App Store, as well as the terms and conditions of these offers. On the other, Apple has prohibited developers from informing consumers on how to subscribe.
These practices, which lasted for around ten years, constitute unfair commercial practices prohibited under Article 102(a) of the Treaty on the Functioning of the European Union.
The Commission indicated that the amount of the fine had been calculated on the basis of the 2006 Guidelines on the method of setting fines. This calculation took into account the duration and seriousness of the infringement as well as Apple’s total turnover and market capitalisation. The Commission also took into account the fact that Apple had provided inaccurate information during the administrative procedure.
Margrethe Vestager indicated that the Commission had also decided to top up the basic amount of the fine by an additional lump sum of €1.8 billion, taking the view that the fine should be sufficiently deterrent to discourage companies from engaging in such unfair practices and to mark the Commission’s determination to discourage this type of behaviour.
Once the fine is paid, it will benefit the EU budget, unless the company appeals. If this happens, the sum will then be paid into a temporarily frozen account.
For further information: https://aeur.eu/f/b4e (Original version in French by Émilie Vanderhulst)