Apple Hit With its First-Ever EU Fine, €1.8bn! Will Anything Change in Cupertino?

Breaking news!‍

Apple hit by its first-ever EU fine over anti-competitive behaviour.

The €1.8bn fine was triggered by a formal complaint raised by Spotify against Apple Music in 2019.

The Background

Investigations into Apple's anti-competitive behaviour in the EU have been ongoing for years.

The App Store on iOS takes a 30% cut from all in-app payments and subscriptions for third-party apps, such as Spotify.

The issue is that Apple doesn't let third-party apps advertise alternative payment methods besides the Apple Store. Therefore, even if third-party apps wished to offer lower prices for users subscribing directly and not through the app store, they are unable to do so.

This creates a problem of transparency towards the end user and is seen as an abuse of dominant position.

The Trigger

As if that wasn't enough, Apple began launching its own apps, directly competing with some of the most popular ones on the store. For instance, Apple Music was launched to rival Spotify, and Apple TV to compete with Netflix.

It goes without saying that Apple Music doesn't pay the 30% cut, which allows them to potentially offer lower subscription prices.

Spotify was not the only one to be upset by Apple's practices. Meta was also among the “victims”.

You may recall the story of Apple's Tracking Transparency in 2022:

Apple provided its users with the option to opt out of tracking by third-party apps, which is essential for effective ad sales for companies like Meta.

Problem is, Apple's own apps don't provide the same option, and users can still be targeted by personalised advertising sold directly by Apple through its Apple Search Ads service. Once again, this was seen as anti-competitive behaviour.

The Future

‍Daniel Ek, CEO and founder of Spotify, published a video on Linkedin yesterday saying he’s happy about the EU’s decision but he’s still skeptical about whether the fine will actually change Apple’s behaviour.

He believes that Apple will just ignore the ruling. Maybe they will apply some small changes here and there, but will not fundamentally change the way they operate. He mentions how similar fines Apple received in other countries like South Korea or The Netherlands also didn’t achieve their ultimate objective.

The Underlying Problem

There is a fundamental problem over the openness of the internet.

Today’s internet is practically owned and operated by a handful of American tech behemoths. Ai doesn’t seem to be solving this problem. In fact, it looks quite the opposite.

From this perspective, the recent lawsuit raised by Elon Musk against OpenAI seems reasonable.