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EU Poised To Fine Apple About 500 Million Euros Over Music Services

The investigation by Brussels was triggered by complaints from Spotify in 2019, alleging that Apple was impeding third-party music services on its devices while favoring its own Apple Music service.

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The European Commission is poised to levy a fine of about 500 million euros ($539 million) on Apple for purportedly violating EU competition laws, as reported by the Financial Times on Sunday.

The investigation by Brussels was triggered by complaints from Spotify in 2019, alleging that Apple was impeding third-party music services on its devices while favoring its own Apple Music service.

One of the focal points of the inquiry centered around Apple's App Store rules, which typically prevent companies like Spotify from directly billing users for subscriptions within their apps. Instead, they are required to use Apple's billing service, which takes a commission of up to 30%.

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Formally charging Apple in 2021, Brussels initially broadened the investigation but later narrowed its focus, dropping allegations regarding the enforcement of its in-app payment system.

The latest phase of the probe scrutinized whether Apple had barred apps from informing users about cheaper subscription options available outside of the App Store, potentially violating EU competition laws.

Sources cited by the Financial Times indicate that the Commission's findings will accuse Apple of abusing its dominant market position and imposing unfair conditions concerning its music service subscription policies.

Should the fine be imposed, it would stand as one of the largest penalties the EU has imposed on a major technology company, following previous hefty fines against Google.

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This reported fine aligns with a broader crackdown within the EU and precedes the implementation of the Digital Markets Act in March, aimed at curbing anti-competitive practices among tech giants like Apple, Amazon, and Google.

Smaller internet firms and other tech businesses, including Spotify, have long voiced grievances over what they perceive as unfair limitations imposed by these industry behemoths.

Under the Digital Markets Act, Apple would be required to permit third-party developers to distribute apps outside the iOS Store and enable those apps to directly bill their customers.

In response to EU regulations, Apple has announced forthcoming changes to its iOS, Safari, and the App Store in the EU, including plans to allow software developers to distribute their apps via alternative stores.

Separately, the European Commission is investigating Apple's restrictions on rivals' access to its Apple Pay mobile system, with Apple already having made concessions related to the case.

Although the timing of the Commission's announcement regarding the fines remains uncertain, it is unlikely to alter the course of the antitrust investigation, according to the FT report.

Apple retains the right to challenge the decision in EU courts. When contacted by CNBC for comment on the report, the tech giant declined, instead referring to a previous statement expressing satisfaction with the narrowed focus of the probe.

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