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.
A driver for an independent contractor to FedEx delivers packages on Cyber Monday in New York, US, on Monday, Nov. 27, 2023.
Stephanie Keith | Bloomberg | Getty Images
President Donald Trump on Wednesday signed an executive order shutting the de minimis trade loophole, effective May 2.
Trump in February abruptly ended the de minimis trade exemption, which allows shipments worth less than $800 to enter the U.S. duty-free. The order overwhelmed U.S. Customs and Border Protection employees and caused the U.S. Postal Service to temporarily halt packages from China and Hong Kong. Within days of its announcement, Trump reversed course and delayed the cancellation of the provision.
Wednesday’s announcement, which came alongside a set of sweeping new tariffs, gives customs officials, retailers and logistics companies more time to prepare. Goods that qualify under the de minimis exemption will be subject to a duty of either 30% of their value, or $25 per item. That rate will increase to $50 per item on June 1, the White House said.
Use of the de minimis provision has exploded in recent years as shoppers flock to Chinese e-commerce companies Temu and Shein, which offer ultra-low cost apparel, electronics and other items. The U.S. Customs and Border Protection has said it processed more than 1.3 billion de minimis shipments in 2024, up from over 1 billion shipments in 2023.
Critics of the provision say it provides an unfair advantage to Chinese e-commerce companies and creates an influx of packages that are “subject to minimal documentation and inspection,” raising concerns around counterfeit and unsafe goods.
The Trump administration has sought to close the loophole over concerns that it facilitates shipments of fentanyl and other illicit substances on the claims that the packages are less likely to be inspected by customs agents.
Temu and Shein have taken steps to grow their operations in the U.S. as the de minimis loophole has come under greater scrutiny. After onboarding sellers with inventory in U.S. warehouses, Temu recently began steering shoppers to those items on its website, allowing it to speed up deliveries. Shein opened distribution centers in states including Illinois and California in 2022, and a supply chain hub in Seattle last year.
WATCH: President Trump signs executive orders for reciprocal tariffs
Apple CEO Tim Cook, center, watches during the inauguration ceremonies for President Donald Trump, right, and Vice President JD Vance, left, in the rotunda of the U.S. Capitol in Washington, Jan. 20, 2025.
Shawn Thew | Afp | Getty Images
Apple slid more than 6% in late trading Wednesday and led a broader decline in tech stocks after President Donald Trump announced new tariffs of between 10% and 49% on imported goods.
The majority of Apple’s revenue comes from devices manufactured primarily in China and a handful of other Asian countries. Nvidia, which manufactures new chips in Taiwan and assembles its artificial intelligence systems in Mexico and elsewhere, fell about 4%, while electric vehicle company Tesla dropped 4.5%.
Across the rest of the megacap universe, Alphabet, Amazon and Meta all dropped between 2.5% and 5%, and Microsoft was down by almost 2%.
If Apple’s postmarket loss is matched in regular trading Thursday, it would be the steepest decline for the stock since September 2020.
Trump on Wednesday afternoon said the new taxes on imported goods would be a “declaration of economic independence” for the country. He announced a 10% blanket tariff on all imports, and higher duties for specific countries, including 34% for China, 20% for European nations, and 24% for Japanese imports, based on what tariffs they charge on U.S. exports, Trump said.
“We will supercharge our domestic industrial base, we will pry open foreign markets and break down foreign trade barriers,” Trump said during his speech. “Ultimately, more production at home will mean stronger competition and lower prices for consumers.”
Stocks broadly got hit by Trump’s announcements. An exchange-traded fund tracking the S&P 500 slid 2.8%, while an ETF following the Nasdaq 100 lost more than 3%.
During his speech, Trump praised Apple, Meta, and Nvidia for spending money and investing in the United States.
“Apple is going to spend $500 billion, they never spent money like that here,” Trump said. “They’re going to build their plants here.”
The Nasdaq just wrapped up its worst quarter since 2022, dropping 10% in the first three months of the year, though the tech-heavy index rose in each of the first two days of the second quarter.
WATCH: President Trump signs executive orders for reciprocal tariffs
Guests including Mark Zuckerberg, Lauren Sanchez, Jeff Bezos, Sundar Pichai and Elon Musk attend the Inauguration of Donald J. Trump in the U.S. Capitol Rotunda on January 20, 2025 in Washington, DC. Donald Trump takes office for his second term as the 47th president of the United States.
Julia Demaree Nikhinson | Getty Images
Amazon submitted a bid to the White House to purchase the social media app TikTok from its Chinese owners, CNBC has confirmed.
The company sent its proposal in a letter this week to Vice President JD Vance and Commerce Secretary Howard Lutnick, according to a source familiar with the matter who asked not to be named because the discussions are confidential. The parties aren’t treating the bid seriously, however, given that it was submitted just days before a deadline staving off a U.S. ban is set to expire, the person said.
Amazon declined to comment.
The e-commerce company’s offer, which was first reported by The New York Times, comes as TikTok’s fate in the U.S. is up in the air. The short-form video app faces another potential shutdown in the U.S. on April 5 if ByteDance, its parent company, can’t reach a deal to divest TikTok’s American operations. Lawmakers passed a bill last year setting a Jan. 19 deadline for the sale, but Trump signed an executive order granting a 75-day extension for a potential deal.
Trump could announce a decision on TikTok’s fate in the U.S. as soon as Wednesday, sources familiar with the situation told CNBC’s David Faber. Mobile technology company AppLovin has also made a bid for TikTok, Faber reported separately, citing sources familiar with the matter.
TikTok has emerged as a major hub for e-commerce as it has poured money into growing its online marketplace, called TikTok Shop. TikTok’s lucrative marketplace, coupled with the app’s more than 170 million users, could be an attractive asset for Amazon. Following TikTok’s success, Amazon launched and then shuttered a short-form video service of its own.
Last August, the two companies formed a partnership that allowed TikTok users to link their account with Amazon and make purchases from the site without leaving the app. The deal attracted scrutiny from lawmakers who were concerned about its potential national security risks.
WATCH: How TikTok Shop is beating Amazon and Temu in social shopping
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports12 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway