Apple has been hit with a $3 billion fine by the European Union for unfairly favouring its own music streaming service over its competition.

The European Commission imposed the 1.84 billion euros fine on Apple as part of an antitrust case that was brought on by a complaint by Spotify around music streaming competition.

It marks the first antitrust penalty that has been imposed against Apple in the EU, as regulators around the world ramp up their focus on anti-competitive practices by tech giants in their app marketplaces.

The case centred on allegations that Apple does not allow app developers to properly inform users of cheaper methods to buy subscriptions outside of Apple’s services, brought forward by Spotify in 2019.

The commission found that Apple banned developers from “fully informing iOS users about alternative and cheaper music subscription services outside of the app”.

“This is illegal, and it has impacted millions of European consumers,” EU competition commissioner Margarethe Vestager said.

This practice was carried on by Apple for nearly a decade and led to users paying “significantly higher prices for music streaming subscriptions”, the Commission said.

The massive fine still pales in comparison to Apple’s profits, with the tech giant reporting a $52 billion profit for just the last three months of 2023.

Apple hits back

Apple has already signalled that it will appeal the decision in court.

“The decision was reached despite the Commission’s failure to uncover any credible evidence of consumer harm and ignores the realities of a market that is thriving, competitive and growing fast,” the company said in a statement following the decision.

“The primary advocate for this decision – and the biggest beneficiary – is Spotify, a company based in Stockholm, Sweden.

“Spotify has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation.

“Spotify wants to bend the rules in their favour by embedding subscriptions prices in their app without using the App Store’s in-app purchase system.

“They want to use Apple’s tools and technologies, distribute on the App Store and benefit from the trust we’ve built with users – and to pay Apple nothing for it.”

Spotify said the European Commission’s decision sends a “powerful message”.

“No company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers,” the company said in a statement.

“While we are pleased that this case delivers some justice, it does not solve Apple’s bad behaviour towards developers beyond music streaming in other markets around the world.

“Our work will not be done until we succeed in securing a truly fair digital marketplace everywhere and our commitment to helping to make this a reality remains unwavering.”

The EU has also launched antitrust proceedings against Apple for its mobile payments service.

Growing antitrust actions

It comes after Apple was recently forced to open up its iOS platform in the EU in response to impending regulations.

Users in the EU will be able to download apps from third-party stores and use contactless payment services other than Apple Pay when making these payments under the changes.

The reforms will allow app developers to create alternative app marketplaces, sell and manage iOS apps through these marketplaces and use platforms other than iOS to display content within apps.

There has been a growing wave of antitrust actions against big tech firms around the world in recent years.

Late last year Google settled an antitrust case in the US for $1 billion over the use of its own payment systems for in-app purchases on Android devices.

Google also agreed to make changes to its app store as part of the settlement.