Apple is set to be hit with an eye-watering fine of over €500 million from the European Union.
The fine comes in the wake of an EU Commission investigation that says the tech giant used illicit practices to give its streaming service an unfair advantage over competitors.
Apple Set to Receive Large Fine
According to The Financial Times, Apple is set to receive its first major fine from Brussels.
Unnamed sources who are close to the case suggest the EU Commission is preparing to issue a $539 million fine in early March.
Antitrust Probe in Tech Giant
The fine comes in the wake of an antitrust investigation carried out by the European Commission, according to CNBC.
Brussels began investigating Apple in 2019 after Spotify accused the tech giant of using illicit practices to favor their streaming services on Apple devices.
Apple’s Illicit Activities
Reports suggest Apple may have blocked various streaming apps from sending notifications to inform iPhone users of cheaper services.
If found guilty, this would go directly against EU rules that enforce fair competition in the single market.
Abuse of Power
According to sources at The Financial Times, the EU Commission is set to accuse Apple of abusing its power in the market.
Brussels also aims to ban the tech giant’s practice of blocking cheaper alternatives from informing its customers of their streaming services, citing this as “unfair trading conditions.”
Hefty Fine for the Tech Company
If Financial Times’ sources are correct, the hefty $539 million fine that goes through next month will stand as one of the largest the EU has ever imposed against a tech company.
The Apple fine comes in the wake of anti-competitive penalties handed out to Google in recent years for malicious practices (via CNBC).
First Time Under the EU Fire
While Apple has never been fined in the past by the EU Commission, it was hit with a hefty €1.1 billion fine from a European nation in 2020, per CNBC.
This came after the French government said the tech giant had engaged in anti-competitive practices. However, the fine was later dropped to around €370 million.
Legal War Between Tech Companies and the EU
Apple’s fine comes at a particularly tense time as Brussels begins to roll out its new Digital Markets Act, which all tech companies must abide by.
Set to come into play in March, the new law aims to rid the anti-competitive practices of tech “gatekeepers” such as Google, Apple, and Amazon.
Competitors Given New Lease on Life
The EU’s new laws have given smaller tech businesses, such as Spotify, hope that they will finally be able to finally compete with Apple and other companies.
In recent years, smaller tech companies have complained of the malicious and unfair practices of companies such as Google and Apple.
Apple Force Customers to Use App Store Billing
One example prohibits Apple device users from directly paying Spotify for its streaming service.
Instead, users are forced to make payments via the Apple Store’s billing service, from which the tech giant takes up to a 30% cut.
Apple Forced to Make Changes
With the Digital Markets Act, Apple has been forced to allow third-party app developers to distribute their products outside of the iOS Store.
The new laws also prohibit Apple from denying these smaller companies the ability to bill the consumer directly.
Right to Appeal
While the announcement of the fine has yet to happen, Apple will likely receive it in the coming weeks.
The tech giant ultimately has the right to appeal the decision. However, it will have little effect on the nature of the antitrust investigation nor the future laws they will have to abide by in the EU.
