Apple has suffered a $2 billion fine at the hands of the European Union (EU) on March 4, 2024 for abusive app store rules for music streaming providers such as Spotify.
The fine originates from a legal complaint that challenged the restrictions and fees that Apple placed on apps in the App Store made by the rival music streaming provider Spotify. These complaints come from worries that customers are being forced to pay unfair prices for subscriptions because they aren’t present to purchase in-app.
Economics teacher Tony Sohn commented, stating that, “Apple’s system stole a considerable amount of profits from apps they sold… I can see how that is a problem and why they addressed it.”
Apple’s app store policy restricted streaming companies from advertising and informing users about subscriptions outside of the main app. Additionally, in the event of a user attempting to buy a subscription, they must make the purchase through Apple’s payment system, which raises and takes a cut of subscription fees up to 30%.
The fine is the most severe penalty Apple has faced since 2016, when the EU filed a 13 billion euro lawsuit against Apple for not paying taxes in Ireland. Apple’s abusive App Store conduct has been going for more than 10 years, leading many to spend excessive amounts of money for subscription services that they otherwise should not have.
In an attempt to comply with the new laws, Apple has given developers various options to sell their subscriptions and apps without such high prices and commission decreases. These new rules allow for companies to tell consumers about their subscriptions without having to pay excessive commission fees.
The United States Justice Department is currently investigating whether or not Apple has violated US antitrust laws by stifling competitors and whether or not Apple must face trial for these crimes in the United States as well.
