Apple, no friend of the European Commission at the best of times, has released a strongly-worded press release in which it explains why it isn't happy about a $2 billion fine levied by the EC. The fine comes after the Commission found that Apple's "abusive App Store rules" unfairly affected music streaming apps like Spotify and others, preventing them from pointing users toward cheaper prices outside of the App Store. It also impacted users by making them pay more, too, the EC suggests. And Apple really isn't happy about it.
In fact, Apple believes that it's all Spotify's fault, rather than its own.
"The primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden," Apple says. "Spotify has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation."
Why the number of times Spotify spoke with officials about an ongoing investigation is something Apple believes it needed to bring up isn't quite clear, but that's just the beginning. Apple then went on to detail how many users Spotify has. And how long the App Store has been around. And tell us about what other developers do on the App Store before offering a thinly veiled threat about pulling out of the EU altogether. And all apparently ignoring the elephant in the room — Apple has been fined because it broke European anti-competitive rules. And just arguing about that won't change anything.
Anti-steering provisions
This all came in a rambling, ranting press release the likes of which are becoming increasingly common from Apple. In it, Apple explains that Spotify doesn't pay Apple anything to ship its app in the App Store — ignoring the Apple developer fee, although admittedly that isn't a lot — because it doesn't use Apple's in-app purchase system. But as is so often the case here, it isn't made clear how that changes what Apple has done nor why it believes it shouldn't have been fined for doing it.
"The Commission's investigation found that Apple bans music streaming app developers from fully informing iOS users about alternative and cheaper music subscription services available outside of the app and from providing any instructions about how to subscribe to such offers," the European Commission's press release reads. And it's right, because we know full well that Apple did this. Apple knows it did it because it's going to release iOS 17.4 this week to change that behavior in order to meet the EU's incoming Digital Markets Act requirements.
Throughout the press release Apple seems to be arguing that because Spotify is doing well, it should just leave well alone. Because it's the biggest music streamer in the land, it should just ignore the fact that Apple broke EU rules. This is an interesting approach, and will presumably be the one Apple allows any company infringing its patents to take in the future, too.
And then we get what reads like a threat to take its ball and go home.
Under the "What's next?" heading, Apple says that it "has been a part of Europe for over 40 years, and today, we support more than 2.5 million jobs across the continent. We’ve helped markets thrive, promoting competition and innovation at every turn — and the App Store is an important part of that story," the press release reads.
Apple will of course appeal the fine, and it might get the figure reduced. But the EC says that Apple's anti-steering provisions are "in breach of Article 102(a) of the Treaty on the Functioning of the European Union (‘TFEU')." It adds that they are "neither necessary nor proportionate for the protection of Apple's commercial interests in relation to the App Store on Apple's smart mobile devices and negatively affect the interests of iOS users, who cannot make informed and effective decisions on where and how to purchase music streaming subscriptions for use on their device."
If that's the case, Apple doesn't really have a leg to stand on and the best it can hope for is a reduction in the fine that's been imposed. It's also worth looking at this fine as a potential warning shot on the eve of the DMA coming into force — the EC's way of saying that Apple should expect a tough time if it intends to play games with the new rules. Given the way Apple intends to comply with some of those rules, some might argue that it already is.
You really should give Apple's press release a read. Especially if you want to see a multi-billion-dollar company blame someone else for its problems.
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