The European Commission could fine Apple Music $39.4 billion for allegedly violating antitrust laws pertaining to restrictions on developers advertising subscriptions, AppleInsider reports.
In 2021, the European Commission issued an objections statement accusing Apple of breaching antitrust regulations. The Commission has now clarified its refusal to take a position on the legality of Apple's in-app purchasing (IAP) obligation for the antitrust investigation.
Apple Could be Facing a $39.4 Billion Fine
The latest statement of objections from the European Commission puts emphasis on the contractual restrictions that Apple enforces on app developers.
The restrictions prohibit developers from informing iPhone and iPad users of alternative, less expensive music subscription options outside the app and allowing them to choose those.
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Apple initially prohibited developers of services like Spotify from mentioning or linking to alternative subscription methods.
Spotify, Developers Urge EC to Take Action
In January, Spotify and several other digital organizations sent a letter to the European Commission requesting it to take action against Apple's "unfair restrictions" imposed on their businesses.
The letter raises several concerns, including the App Store's stranglehold on Apple's proprietary payment system, restrictions on developers' access to user data, and unfair changes to terms and conditions.
The letter urges immediate action to end what the signatories describe as Apple's abusive behavior and states that the EU can take the lead in this area.
More About the Recent EC Antitrust Lawsuit
According to AppleInsider, Apple has effectively disproved the claim that it forces developers to use its in-app purchasing system, which was a major part of Spotify's initial 2019 complaint to the EC. However, the business now has to address the claim that it restricted developers in the past.
Spotify's general counsel, Eve Konstan, welcomed the European Commission's update, saying, "Apple's anticompetitive behavior and unfair practices have harmed consumers and disadvantaged developers for far too long."
Konstan requests that the Commission act quickly in this instance to safeguard consumers and reinstate fair competition on the iOS platform.
The length of an antitrust investigation depends on a number of variables, including the case's complexity, the degree of cooperation between the parties and the Commission, and the exercise of defense rights.
Apple is yet to respond to the latest case update from the European Commission.
What This Means for Apple
If the European Commission decides to impose a fine on Apple, it could reach up to 10 percent of the company's annual global revenue. Apple's 2022 revenue was $394.328 billion, so the maximum fine could be around $39 billion.
Apple has previously been accused of antitrust violations. In 2020, the company faced an investigation into the App Store's practices in the United States.
Apple was accused of using its market dominance to suppress competition and charge exorbitant prices. In November 2020, the company reduced App Store fees for small businesses earning less than $1 million annually from 30% to 15%.
The outcome of the European Commission's investigation will have far-reaching consequences for Apple and the broader technology industry. It remains to be seen how the company will react to the most recent allegations and whether it will be subject to a hefty fine.
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