Apple hit with more than $1.95 billion EU antitrust fine over music streaming
The European Commission, the European Union’s executive arm, on Monday hit Apple with a 1.8 billion euro ($1.95 billion) antitrust fine for abusing its dominant position on the market for the distribution of music streaming apps.
The commission said it found that Apple had applied restrictions on app developers that prevented them from informing iOS users about alternative and cheaper music subscription services available outside of the app.
Apple also banned developers of music streaming apps from providing any instructions about how users could subscribe to these cheaper offers, the commission alleged.
This is Apple’s first antitrust fine from Brussels and is one of the biggest dished out to a technology company by the EU.
Apple shares were down around 2.5% in morning trading in the U.S.
The European Commission opened an investigation into Apple after a complaint from Spotify in 2019. The probe was narrowed down to focus on contractual restrictions that Apple imposed on app developers which prevent them from informing iPhone and iPad users of alternative music subscription services at lower prices outside of the App Store.
Apple’s conduct lasted almost 10 years, according to the commission, and “may have led many iOS users to pay significantly higher prices for music streaming subscriptions because of the high commission fee imposed by Apple on developers and passed on to consumers in the form of higher subscription prices for the same service on the Apple App Store.”
Apple response
In a fiery response to the fine, Apple said Spotify would stand to gain the most from the EU pronouncement.
“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,” Apple said in a statement.
“Today, Spotify has a 56 percent share of Europe’s music streaming market — more than double their closest competitor’s — and pays Apple nothing for the services that have helped make them one of the most recognisable brands in the world.”
Apple said that a “large part” of Spotify’s success is thanks to the Cupertino, California-based giant’s App Store, “along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world.”
Apple said that Spotify pays it nothing. That’s because instead of selling subscriptions in their iOS app, Spotify sell them via their own website stead. Apple does not collect a commission on those purchases.
Developers over the years have spoken out against the 30% fee Apple charges on in-app purchases.
Spotify in a statement called the commission’s decision “an important moment in the fight for a more open internet for consumers.”
“Apple’s rules muzzled Spotify and other music streaming services from sharing with our users directly in our app about various benefits—denying us the ability to communicate with them about how to upgrade and the price of subscriptions, promotions, discounts, or numerous other perks,” Spotify said.
“Of course, Apple Music, a competitor to these apps, is not barred from the same behaviour.”
Apple fine just a ‘parking ticket’
The commission said Apple prevented developers of music streaming apps from informing their iOS users within their apps about prices of subscriptions or offers available elsewhere.
App developers could not include links in their apps leading iOS users to the app developers’ websites where alternative subscription could be bought, the commission alleges.
The EU’s executive arm also said Apple prevented app developers from contacting their own newly acquired users — for example via email — to inform them about alternative pricing options.
In a press briefing, EU antitrust chief Margrethe Vestager qualified the basic amount of the fine for Apple, excluding the 1.8 billion euro lump sum, as “quite small” and likened it to a “speeding ticket, or a parking ticket” relative to the company’s scale.
“When Apple imposes these anti-steering provisions on the music provider, they as developers have no other choice than to either accept them or abandon the App store. Apple with its App Store currently holds a monopoly,” Vestager said.
She added the commission has ordered Apple to remove the so-called anti-steering provisions and to “refrain from similar practices in the future.”
EU scrutiny on tech giants rises
The fine will ramp up tensions between Big Tech and Brussels at a time when the EU is increasing scrutiny of these firms.
Last year, the commission designated Apple among other tech firms like Microsoft and Meta as “gatekeepers” under a landmark regulation called the Digital Markets Act, which broadly came into effect last year.
The term gatekeepers refers to massive internet platforms which the EU believes are restricting access to core platform services, such as online search, advertising, and messaging and communications.
The Digital Markets Act aims to clamp down on anti-competitive practices from tech players, and force them to open out some of their services to other competitors. Smaller internet firms and other businesses have complained about being hurt by these companies’ business practices.
These laws have already had an impact on Apple. The company announced plans this year to open up its iPhone and iPad to alternative app stores other than its own. Developers have long complained about the 30% fee Apple charges on in-app purchases.
Vestager fired a warning shot to Apple in regard to the DMA.
“In a couple of days on the 7th of March, Apple will have to comply with the full list of dos and don’ts under the DMA. Among others, Apple can no longer impose rules such as the anti-steering obligations … and this holds for any app on the App Store, not just music streaming apps.”
— CNBC’s Ryan Browne and Ruxandra Iordache contributed to this article.
Technology
Cognition to buy AI startup Windsurf days after Google poached CEO in $2.4 billion licensing deal
In this photo illustration, a man seen holding a smartphone with the logo of US artificial intelligence company Cognition AI Inc. in front of website.
Timon Schneider | SOPA Images | Sipa USA | AP
Artificial intelligence startup Cognition announced it’s acquiring Windsurf, the AI coding company that lost its CEO and several other senior employees to Google just days earlier.
Cognition said on Monday that it will purchase Windsurf’s intellectual property, product, trademark, brand and talent, but didn’t disclose terms of the deal. It’s the latest development in an AI talent war, as companies like Meta, Google and OpenAI fiercely compete for top engineers and researchers.
OpenAI had been in talks to acquire Windsurf for about $3 billion in April, but the deal fell apart, and Google said on Friday that it hired Windsurf’s co-founder and CEO Varun Mohan. Google is paying $2.4 billion in licensing fees and for compensation, as CNBC previously reported.
“Every new employee of Cognition will be treated the same way as existing employees: with transparency, fairness, and deep respect for their abilities and value,” Cognition CEO Scott Wu wrote in a memo to employees on Monday. “After today, our efforts will be as a united and aligned team. There’s only one boat and we’re all in it together.”
Cognition didn’t immediately respond to CNBC’s request for comment. Windsurf directed CNBC to Cognition.
Cognition is best known for its AI coding agent named Devin, which is designed to help engineers build software faster. As of March, the startup had raised hundreds of millions of dollars at a valuation of close to $4 billion, according to a report from Bloomberg.
Both companies are backed by Peter Thiel’s Founders Fund. Other investors in Windsurf include Greenoaks, Kleiner Perkins and General Catalyst.
“I’m overwhelmed with excitement and optimism, but most of all, gratitude,” Jeff Wang, the interim CEO of Windsurf, wrote in a post on X on Monday. “Trying times reveal character, and I couldn’t be prouder of how every single person at Windsurf showed up these last three days for each other and for our users.”
Wu said that the acquisition ensures all Windsurf employees are “treated with respect and well taken care of in this transaction.” All employees will participate financially in the deal, have vesting cliffs waived for their work to date and receive fully accelerated vesting for their, according to the memo.
“There’s never been a more exciting time to build,” Wu wrote.
WATCH: Google snatches Windsurf CEO after OpenAI deal dissolves
Meta CEO Mark Zuckerberg looks on before the luncheon on the inauguration day of U.S. President Donald Trump’s second presidential term in Washington on Jan. 20, 2025.
Evelyn Hockstein | Reuters
Meta on Monday said it has removed about 10 million profiles for impersonating large content producers through the first half of 2025 as part of an effort by the company to combat “spammy content.”
The crackdown is part of Meta’s broader effort to make the Facebook feed more relevant and authentic by taking action against and removing accounts that engage in “spammy” behavior, such as content created using artificial intelligence tools.
As part of that initiative, Meta is also rolling out stricter measures to promote original posts from creators, the company said in a blog post.
Facebook also took action against approximately 500,000 accounts that it identified to be engaged in inauthentic behavior and spam. These actions included demoting comments and reducing distribution of content, which are intended to make it harder for these accounts to monetize their posts.
Meta said unoriginal content is when images or videos are reused without crediting the original creator. Meta said it now has technology that will detect duplicate videos and reduce the distribution of that content.
The action against spam and inauthentic content comes as Meta increases its investment in AI, with CEO Mark Zuckerberg on Monday announcing plans to spend “hundreds of billions of dollars” on AI compute infrastructure to bring the company’s first supercluster online next year.
This mandate comes at a time when AI is making it easier to mass-produce content across social media platforms. Other platforms are also taking action to combat the increase of spammy, low-quality content on social media, also known as “AI slop.”
Google’s YouTube announced a change in policy this month that prevents content that is mass-produced or repetitive from being eligible for being awarded revenue.
This announcement sparked confusion on social media, with many users believing this was a reversal on YouTube’s stance on AI content. However, YouTube clarified that the policy change is aimed at curbing unoriginal, spammy and repetitive videos.
“We welcome creators using AI tools to enhance their storytelling, and channels that use AI in their content remain eligible to monetize,” said a spokesperson for YouTube in a blog post to clarify the new policy.
YouTube’s new policy change will take effect on Tuesday.
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