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Business News/ Companies / News/  Apple fined $2 billion by EU for using App Store to thwart competition
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Apple fined $2 billion by EU for using App Store to thwart competition

Apple banned app developers from ‘fully informing iOS users about alternative and cheaper music subscription services outside of the app’, said the European Commission.

Apple logo is seen on the Apple store at The Marche Saint Germain in Paris on July 15, 2020. REUTERS/Gonzalo Fuentes/File Photo (REUTERS)Premium
Apple logo is seen on the Apple store at The Marche Saint Germain in Paris on July 15, 2020. REUTERS/Gonzalo Fuentes/File Photo (REUTERS)

The European Union (EU) on Monday fined the US tech giant Apple Inc nearly $2 billion for using the App Store to thwart competition, reported news agency Associated Press

Apple banned app developers from "fully informing iOS users about alternative and cheaper music subscription services outside of the app", the report quoted the European Commission as saying.

Under the EU antitrust rules, that is illegal. The report further stated that Apple worked in this fashion for almost a decade, meaning many users paid 'significantly higher prices for music streaming subscriptions,' according to the commission.

ALSO READ: Apple may launch new iPads, and MacBooks this week. Everything we know so far

The latest fine of $1.8 billion on Apple Inc by the EU arrived after a long-running investigation triggered by a complaint from Swedish streaming service Spotify five years ago.

Recently, to crack down on big tech companies, the EU has led global efforts that include a series of multibillion-dollar fines for Google and charging Meta with distorting the online classified ad market.

Apart from this, the EU also opened a separate antitrust investigation into Apple's mobile payments service.

Initially, the commission's probe centred on two concerns. One was the iPhone maker's practice of forcing app developers who are selling digital content to use its in-house payment system, which charges a 30 per cent commission on all subscriptions.

However, the EU later dropped that to focus on how Apple prevents app makers from telling their users about cheaper ways to pay for subscriptions that don’t involve going through an app.

In that probe, the EU found that Apple banned streaming services from telling users about how much subscription offers cost outside of their apps, which also included links in their apps to pay for alternative subscriptions or even emailing users to tell them about different pricing options.

The latest episode of imposing fine on Apple Inc comes the same week the new EU rules are set to kick in, aimed at preventing tech companies from dominating digital markets.

Due to take effect on Thursday, the Digital Markets Act imposes a set of do's and don'ts on 'gatekeeper' companies including Apple, Meta, Google parent Alphabet, and TikTok parent ByteDance — under threat of hefty fines.

Meanwhile, Apple revealed how it will comply, including allowing iPhone users in Europe to use app stores other than its own and enabling developers to offer alternative payment systems.

The commission also has opened a separate antitrust investigation into Apple’s mobile payments service, and the company has promised to open up its tap-and-go mobile payment system to rivals to resolve it.

With agency inputs.

 

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Published: 04 Mar 2024, 05:53 PM IST
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