Spotify (SPOT.US) complains about being fined 18 billion euros by the EU! Apple (AAPL.US) responds in a blog post: Irony!

Apple (AAPL.US) was fined 18 billion euros (about 20 billion US dollars) by the European Union on Monday for allegedly stifling competition from music streaming rivals, including Spotify (SPOT.US), on its platform. The EU also ordered Apple to stop preventing music streaming apps from informing users of more favorable services outside of the Apple App Store. EU antitrust chief Margrethe Vestager said, "For over a decade, Apple has abused its dominant position in the market for distributing music streaming apps through its App Store. Their practices have limited the ability of developers to inform consumers of cheaper music services outside of the Apple ecosystem." Apple has said that they will appeal the EU's decision, sparking a potential legal battle that could last for years. The company has pointed out that the European Commission failed to find any substantial evidence of harm to consumers and ignored the reality of a thriving, competitive, and rapidly expanding market. The EU's investigation into Apple was triggered by a complaint from Spotify nearly 5 years ago. Spotify complained to the EU that Apple was preventing Spotify and other music streaming apps from offering users alternative ways to subscribe to their services, bypassing Apple's in-app purchase commission. Additionally, Spotify believed that Apple was using its dominant position on the platform to give its own services, such as Apple Music, Apple Podcasts, and Apple Books, an advantage over services on other platforms. In response, Apple made a significant concession in March 2022, allowing "reader" apps to provide users with external links for paid subscriptions. This meant that Spotify, Netflix, and other content platforms could bypass Apple's commission mechanism as long as they complied with Apple's rules. However, Spotify and other companies were not satisfied with this. Reports indicated that Spotify continued to face restrictions, with Apple preventing them from informing iPhone users of cheaper payment methods outside of Apple's subscription channel. This was reportedly the main reason for Apple's fine. Margrethe Vestager stated that Apple's practices prevented consumers from making informed choices, potentially resulting in some people paying more than they needed to. She said, "The Commission found that Apple's rules have concealed key information about prices and features from consumers." It is worth noting that Margrethe Vestager has made it a core strategy to dismantle the dominance of tech giants in the EU through fines and regulatory actions. She has already fined Alphabet (GOOGL.US)s Google over 8 billion euros and ordered Apple to repay an alleged unfair tax benefit of 13 billion euros from Ireland. The EU has also introduced a series of new regulations aimed at preventing market abuses. Under the Digital Markets Act that came into effect this week, it will be illegal for the most powerful companies to prioritize their own services over competitors' services. These companies will be prohibited from merging personal data across different services, using data collected from third-party sellers to compete with them, and must allow users to download applications from competitors' platforms. Apple responded forcefully, stating that Spotify does not pay Apple and that the EU's decision is ironic. Following the EU's penalty decision, Apple issued a statement on its website on March 4th, stating that Spotify was the main supporter and biggest beneficiary of the EU's decision. Apple said, "Ironically, today's decision, made in the name of competition, actually entrenches the leading position of a successful European company in the digital music market." Apple also pointed out that Spotify currently holds a 56% share in the European music streaming market, more than twice that of its closest competitor, and has never paid anything to Apple for the services that helped it build, update, and share its app among Apple users in 160 countries and regions globally. It is worth noting that there were reports last month that the EU would rule on Spotify's complaint against Apple in early March. In response, an Apple spokesperson said on February 27th, "Were proud to support the success of all developers, including the worlds largest music streaming app Spotify. Spotify does not pay Apple any service fees, even though these services help them build, update, and share their app among Apple users in 160 countries and regions globally. Fundamentally, their complaint is about trying to use all of Apples tools without paying for the value they provide." Apple states that the case only focuses on Apple's rules against circumvention, claiming that iOS users do not know how to subscribe to music streaming services outside of the app, "but this is not true." Spotify and other music streaming services market to consumers through email marketing, social media, SMS, and online advertising. Apple believes that there is no evidence of harm to consumers in this case, and that European consumers have more choices than ever before in the growing digital music market. Apple further argues that this investigation will not promote competition, but rather may solidify Spotify's dominance in the market. Apple has publicly complained that this is why Spotify has been so closely cooperating with the European Commission in this case in fact, during this investigation, Spotify has met with the Commission over 65 times.