from Hacker News

Apple hit with over 1.8B euro EU antitrust fine in Spotify case

by nopakos on 3/4/24, 12:11 PM with 677 comments

  • by todd-davies on 3/4/24, 3:16 PM

    Note that this fine is made up of 0.04bn of fine and 1.8bn of deterrent against future anti-competitive behaviour [1]. The the 2006 fine-setting guidelines allow the Commission to do that [2].

    We should read the 1.8bn lump sum (roughly 0.5% of Apple's revenue) as partially being about music streaming and app stores, but mainly a warning to all large firms which are currently jockeying for a dominant position in emerging tech like generative AI and visual computing.

    The warning: play fair and compete on the merits, or see you in court.

    [1] "the Commission decided to add to the basic amount of the fine an additional lump sum of €1.8 billion to ensure that the overall fine imposed on Apple is sufficiently deterrent" https://ec.europa.eu/commission/presscorner/detail/en/ip_24_... [2] See paras 30 and 31. https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A...

  • by braza on 3/4/24, 12:29 PM

    For whom was in tech during 90s and now in 2020s, what are the differences between Microsoft back then and Apple now in terms of why the regulators are so "soft" against an actor that is overplaying it's hand for consumers?

    I was not in tech in that time, but I was cognizant about the fact that entire segments of media and policy makers just dunked on Microsoft due to anti-competitive practices back then, and I recall congressmen and congresswomen, members of DoJ and so on openly talking about break Microsoft in pieces and I wonder why we do not have those conversations today in the biggest markets (China, US and EU)?

  • by kingsleyopara on 3/4/24, 1:57 PM

    Worth pointing out that when this complaint was filed Spotify was publicly complaining about the lack of equal access to the HomePod and Apple Watch.[0]

    Apple addressed this with API’s at WWDC the following year.[1] Yet here we are, almost 4 years later and Spotify have yet to implement support whereas competing services have.[2]

    [0] https://newsroom.spotify.com/2019-03-13/consumers-and-innova...

    [1] https://developer.apple.com/videos/play/wwdc2020/10061/

    [2] https://www.macrumors.com/2021/05/06/deezer-announces-voice-...

  • by miguelxt on 3/4/24, 12:28 PM

    Spotify does not get that money. The general EU budget does.

    > Fines imposed on undertakings found in breach of EU antitrust rules are paid into the general EU budget. This money is not earmarked for particular expenses, but Member States' contributions to the EU budget for the following year are reduced accordingly. The fines therefore help to finance the EU and reduce the burden for taxpayers.

    https://competition-policy.ec.europa.eu/index/fines_en

  • by s1k3s on 3/4/24, 12:52 PM

    This isn't about music streaming but about the payment restrictions Apple forces on Appstore devs. The court decided that Apple's practices destroy competition, which is obviously true. Also it's in line with the new gatekeeping laws that are coming this month.

  • by Glimjaur on 3/4/24, 1:44 PM

  • by madeofpalk on 3/4/24, 1:11 PM

    Spotify really has the short end of the stick here. Apple does themselves no favors by participating from a privileged position at every point in the market. Apple App Store sets rules that disadvantages Apple Music's competitors.

    To offer subscriptions on iOS, Spotify must give away 30% of it's revenue to Apple. Yet Apple compete with them with Apple Music. Do you think Apple is giving away 30% of it's Apple Music revenue? This means that in order for Spotify to compete head-to-head with Apple Music, it must either charge 30% more, or maybe 30% less money than it's next competitor.[0]

    This is on top of Apple's blatently unfair rules that prevent developers actually explaining any of them to it's users, or informing users how to actually sign up or get a cheaper option. If Apple believes these rules are so correct, why does it ban communicating them to it's users?

    [0] Indeed, for Apple Music on Android Apple bypasses Google Play payments, it's 30% cut, and bills itself via credit card.

  • by iammjm on 3/4/24, 1:31 PM

    I like Spotify and I like Apple. But Apple do treat Spotify badly - I assume it's nothing personal but just sheer abuse of power to push their own product - Apple Music. Thanks to this I as a end user get a worse product - buggy Apple Watch App, connectivity issues, reduced functionality

  • by vinay_ys on 3/4/24, 2:48 PM

    Currently Apple wants to charge core technology fee per install (irrespective of App Store or not, after first 1 million install) and App Store commission of 14.1666% of total revenue. This seems egregious because it is charging it on customer transaction and ultimately it is coming out of customer pockets when they have already paid Apple for the hardware.

    Instead, Apple should have disaggregated their fees. IMO, they can charge the following fees fairly:

    1. Developer Ecosystem Tools – compilers, libraries, entitlements – can be one time or annual fees, not coupled with number of installs or revenue. (mandatory, entitlement fees could be per entitlement purchased by the app).

    2. App Store registration fees – can be one time or annual fees, not coupled with number of installs or revenue. (optional – can choose to not use App Store)

    2.1 App Store technical fees for app binary release certification – charged per app release/update.

    2.2 App Store bandwidth fees – per app install delivered via App Store – charged per total bytes delivered.

    2.3 App Store in-app purchase payment fees – percent of payment processed (currently 0.25%).

    2.4 App Store ads fees – developers can choose to pay for Apple Ads for boosted discovery of their app within App Store.

    They could provide free quotas for each of the above. That way free apps can still exist.

    Apple can also provide iOS level capability via System Preferences or managed device profiles to lock App stores (or alternate app stores).

    IMHO, this is likely the path that would be well-received and will be followed by alternate app stores as well.

  • by Moldoteck on 3/4/24, 12:31 PM

    I salute the decision, but I wonder, is the fine big enough? I mean how much money did apple make with this behavior. If even after the fine they are net positive, wouldn't they continue the same way?

  • by ankit219 on 3/4/24, 12:42 PM

    Somehow I wonder if this is indeed protectionism. Slack filed a complaint against Microsoft too, but no action has been taken on that. Having said that, it took five years and three pivots for EU to arrive at this decision. So, wonder how long it will take for Slack to come through.

  • by moogly on 3/4/24, 6:40 PM

    Why are we talking about Microsoft's behavior 30 years ago in this thread about current Apple? Appalling diversionary tactic, that's what it is. I guess the parallel I can draw here is that just as you shouldn't defend whatever unrelated crap Microsoft pulled off in the 90s,you shouldn't defend the crap Apple is pulling off today.

  • by Manfred on 3/4/24, 12:41 PM

    I will miss the handy subscription overview and a minimal amount of clicks to cancel or request a refund. I wish we could have both.

  • by punnerud on 3/4/24, 12:30 PM

    Do big tech companies listen to anything else than fines or loss of income? If there is any other way, that would be preferable

  • by ftyhbhyjnjk on 3/4/24, 12:33 PM

    Awesome news! Apple deserve far worse than this.

  • by lapcat on 3/4/24, 1:46 PM

    The European Commission announcement: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_... (ironically with cookie banner)

    Apple's response: https://www.apple.com/newsroom/2024/03/the-app-store-spotify...

  • by shreyansh_k on 3/4/24, 12:42 PM

    Spotify does seem to be in an interesting position where it gets to piggyback on Apple's whole infrastructure and ecosystem without paying Apple anything. That should count for something...

  • by octacat on 3/4/24, 9:45 PM

    It is kinda obvious that Apple does not really want to comply with markets act, so deterrent is required here.

  • by throwaway2037 on 3/4/24, 1:44 PM

  • by seec on 3/5/24, 7:47 AM

    As an "old" Apple customer, I'm going to say it's well deserved it's not like they didn't work hard for that to happen. Apple's behavior since a few years after Job's passing (around 2015) has been appalling on many fronts. They take their customers for fools and try very hard to trap them into their prison with very little recourse (and no you don't just get rid of very expensive devices for an alternative, especially if many of your purchases are dependent on the use of one of those devices).

    As I get older, I care less and less especially since I am unlikely to purchase another iPhone (at the current price point with the current limitations) or any other Apple devices for that matters. In fact, the moment I decide to replace my Apple watch all the rest will follow in short order. While the platforms are still nice in some ways, they just don't provide enough lasting value with the current pricing and forced obsolescence (both hardware and software).

    Anyway that's good news for everyone because in the futur Apple and their friends will maybe think twice before fucking over their customers with absurdly anti-competitive rules.

  • by monkin on 3/4/24, 5:11 PM

    As for me, Spotify could cease to exist. With each passing year, they become even more unusable. Now, even music recommendations are turning into rubbish. Not to mention the UI experiments...

  • by bengale on 3/4/24, 3:41 PM

    I wonder how many billions in fines the EU can take out of US companies before they start to get political blowback.

  • by arkadiytehgraet on 3/4/24, 12:34 PM

    Could someone please explain to me the following: does Apple have to pay the fine just once and then it can continue with the same practice of taking its 30% cut and preventing Spotify to direct users outside of the app for payment?

    Or can EU sue Apple immediately again for the same thing? Or does Apple get some time to change their ways and if they don't, then they will get fined even more?

  • by TrackerFF on 3/4/24, 12:28 PM

    Good, good. EU seems to be a good watchdog, with actual bite, as far as scummy BigTech tactics go.

  • by rvz on 3/4/24, 1:26 PM

    Great start. It's about time that Microsoft gets investigated as well.

  • by philoinvestor on 3/4/24, 12:33 PM

    I wrote a few post on Apple's brewing problems, outlined within: https://www.philoinvestor.com/p/downside-at-apple-a-10x-in-1...

  • by mrkramer on 3/4/24, 1:17 PM

    Apple always thinks they are right and they know the best, the very same stubborn mindset as Google. And why they keep repeating "Spotify Pays Apple Nothing"?!

  • by udev4096 on 3/4/24, 1:52 PM

    What if Apple doesn't pay the fine?

  • by sneak on 3/4/24, 12:36 PM

    This is how much revenue Apple accumulates in 45 hours.

    Apple’s 380B USD in annual revenue is over a billion dollars per day.

  • by newbie578 on 3/4/24, 12:44 PM

    Now we await for the app store because of DMA. Let’s see how obtuse Apple can be.

  • by rchaud on 3/4/24, 1:48 PM

    Apple blocking even the mention of alternative payment options in its app is pathetic. They are what they supposedly reviled in the original 1984 commercial for the Mac [0]. They're even doing "newspeak" in the brazenly self-serving way they attempt to justify these choices.

    The open web is the metaphorical sledgehammer here. Megacorps need to go back to selling cool hardware as is, instead of $1000 trojan horses for whatever Wall St analyst-approved "service" they can tack on.

    [0] https://www.youtube.com/watch?v=VtvjbmoDx-I

  • by sonicanatidae on 3/4/24, 6:38 PM

    Apple fined 2% of the money they have in offshore accounts that they never paid taxes on.

    FTFY.

  • by mikae1 on 3/4/24, 12:28 PM

    Great news. Finally big tech is no longer untouchable. I hope there will be repercussions for the App Store situation [1] too.

    [1] https://www.reuters.com/technology/apple-faces-strong-action...

  • by jph on 3/4/24, 12:32 PM

    The Apple press release response is here: https://www.apple.com/newsroom/2024/03/the-app-store-spotify...

  • by malermeister on 3/4/24, 12:57 PM

    Interesting to see how positive the feedback in these comments is. I predict the mood will turn once the West Coast wakes up...

  • by macinjosh on 3/4/24, 2:21 PM

    A financial hangnail for Apple. Thoughts and prayers to Cupertino. /s

  • by perryizgr8 on 3/4/24, 2:45 PM

    I don't understand. If Spotify (or EU) is unhappy with Apple's offerings and don't think they are worth the money, they can simply build their own smartphone ecosystem and offer their products on there. Why coerce Apple? Why not let them do their own thing? It's not like they are preventing you from developing your own technology or funding/buying from someone else.

  • by YetAnotherNick on 3/4/24, 12:25 PM

    Is the fine going to EU politicians or to Spotify?