Apple faces nearly $2 billion fine as EU rules against tech giant

Mar 4

Simone Del Rosario Anchor

By Simone Del Rosario (Anchor), Evan Hummel (Producer), Jake Maslo (Video Editor)

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Apple is facing a nearly $2 billion fine from the European Union. The EU leveled the fine in response to an antitrust penalty against Apple on Monday, March 4, ruling it forbade rivals like Spotify from notifying customers of how they could pay for cheaper subscriptions outside of Apple’s app store, according to The Associated Press.

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The EU said that the fine imposed on Apple “reflects both Apple’s financial power and harm that Apple’s conduct inflicted on millions of European users.”

However, Apple disagreed with the decision.

“The facts simply don’t support this decision,” the company said in a statement regarding the EU’s ruling.

The ruling by the EU comes after Spotify argued Apple’s 30% commission fees hurt the company financially while benefiting Apple. The Verge reported that Apple was able to sell subscriptions to Apple Music through its app store without being assessed a similar fee.

However, Apple challenged Spotify’s arguments, saying Spotify added more than 100 million subscribers outside of its app store over the last eight years, according to The Verge. Additionally, Apple contends that Spotify benefited from Apple’s software tools and app updates without paying for the services because of that.

The ruling by the EU is part of a larger crackdown. According to The New York Times, a new EU rule that mandates Apple to allow third-party marketplaces on the iPhone goes into effect this year. Apple is reportedly refining its app store to comply with the law.

Apple is also facing a legal fight in the U.S.

The New York Times reported that a U.S. court ruled Apple must allow app developers to link to other payment methods. A judge ordered the move after a legal challenge from Epic Games, the maker of Fortnite. As a result, Apple did allow developers to link out to web-based payment methods, but it is still charging up to a 27% commission fee.

Meanwhile, as European regulators enforce penalties on Apple, the company reported revenue of $119.58 billion and a net profit of $33.92 billion in its latest quarter.

Tags: apple, Apple Store, Europe, European Union, Spotify, Tech, The New York Times

[SIMONE DEL ROSARIO]

IT’S ONE OF THE BIGGEST E-U FINES EVER LEVIED AGAINST BIG TECH.

EUROPEAN REGULATORS ON MONDAY RULED APPLE MUST PAY NEARLY TWO-BILLION DOLLARS OVER APP STORE ABUSES FROM A CASE BROUGHT ON BY SPOTIFY.

THE EUROPEAN COMMISSION FOUND APPLE PREVENTED STREAMING SERVICES FROM INFORMING CUSTOMERS ABOUT PAYMENT OPTIONS OUTSIDE ITS APP STORE, WHICH CHARGES UP TO 30% COMMISSION.

THE E-U SAYS THE SIZE OF THE FINE “REFLECTS BOTH APPLE’S FINANCIAL POWER AND THE HARM THAT APPLE’S CONDUCT INFLICTED ON MILLIONS OF EUROPEAN USERS.”

APPLE SAYS, “THE FACTS SIMPLY DON’T SUPPORT THIS DECISION,” AND VOWS TO APPEAL.

SPOTIFY HAD ARGUED APPLE’S EXORBITANT COMMISSION FEES HURT THEM FINANCIALLY WHILE BENEFITING APPLE.

APPLE MUSIC CAN REPORTEDLY SELL SUBSCRIPTIONS DIRECTLY THROUGH THE APP STORE WITHOUT A SIMILAR FEE.

BUT APPLE CHALLENGED SPOTIFY’S ARGUMENT, SAYING SPOTIFY ADDED MORE THAN 100 MILLION SUBSCRIBERS OUTSIDE ITS APP OVER THE LAST EIGHT YEARS.

THEY CLAIM SPOTIFY BENEFITS FROM APPLE’S SOFTWARE TOOLS AND APP UPDATES WITHOUT PAYING FOR IT BECAUSE OF THAT.

THIS CASE IS PART OF A BIGGER CRACKDOWN ON APPLE’S APP STORE DOMINANCE. THERE’S A NEW LAW TAKING EFFECT IN THE E-U WHICH MANDATES APPLE ALLOW THIRD-PARTY MARKETPLACES ON THE IPHONE.

APPLE IS ALSO FIGHTING THIS BATTLE IN THE U-S.

U-S COURTS ALSO RULED THE TECH GIANT MUST ALLOW APP DEVELOPERS TO LINK OUT TO OTHER PAYMENT METHODS.

A JUDGE ORDERED IT AFTER A LEGAL CHALLENGE FROM FORTNITE-MAKER EPIC GAMES. AS A RESULT, APPLE DID ALLOW DEVELOPERS TO LINK OUT TO WEB-BASED PAYMENT METHODS BUT IS STILL CHARGING UP TO A 27 PERCENT COMMISSION FEE.