Apple Faces 1st Antitrust Penalty from EU; Tech Giant Fined $2 Billion Over Unfair Music Streaming Practice

Apple faced its first antitrust penalty from the European Union. The bloc accused the giant gadget maker of breaking its competition laws by having unfair music streaming business practices.

The European Union confirmed this in its official press release, which was published on Monday, Mar. 4. The European Commission claims that Apple abused its dominant position in the market.

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Employees stand in an Apple retail store in Grand Central Terminal, January 3, 2019 in New York City. U.S. stocks dropped again on Thursday after Apple warned that its first-quarter sales would be less than expected.

Officials further stated that Apple broke EU's laws by unfairly distributing music streaming apps to its iPad and iPhone users through its App Store.

Apple Faces 1st Antitrust Penalty From EU

According to the Associated Press's latest report, the EU fined Apple almost $2 billion for breaking its competition laws. The bloc conducted an investigation and discovered that it is restricting other music apps.

"Apple applied restrictions on app developers preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the app," said the European Commission via its official press release.

EU officials said Apple's "anti-steering provisions" are against the bloc's competition policies.

"This is illegal, and it has impacted millions of European consumers," said EU Competition Commissioner Margrethe Vestager during a news conference.

The commission said that Apple has been doing this illegal business practice for the past decade, which clearly forced iOS users to significantly pay settle for higher prices for music streaming subscriptions.

What EU Discovers in Apple's Music Streaming Business Activities

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A man uses his mobile phone as he walks past advertising for the new iPhones outside the Apple store in Hong Kong on October 10, 2019. - Apple on October 10 removed an app criticised by China for allowing protestors in Hong Kong to track police.

The European Commission discovered that Apple bans other streaming app developers from promoting their cheaper applications and stops them from providing the necessary instructions to guide customers to have a more affordable streaming app alternative.

EU discovered that Apple's anti-steering provisions are banning app developers from doing the following:

Informing iOS consumers about the price differences between Apple-owned and other alternative music applications.
Information iPhone and iPad users from knowing the prices of cheaper music streaming alternatives on the internet.
Including app links that would prevent iPhone and iPad owners from visiting app developers' websites.

"Apple's anti-steering provisions led to non-monetary harm in the form of a degraded user experience," said the European Commission.

EU officials said that what Apple did led to only two things:

Users never subscribed to any service because they did not find the right one on their own.
iOS users had to engage in a cumbersome search before they found their way to relevant offers outside the app