The European Union (EU) is reportedly preparing to take action against Apple over alleged anticompetitive practices in its App Store.
The EU regulators are investigating Apple’s blocking of music services from promoting the alternative, cheaper subscription options they offer outside of the App Store, Bloomberg reported Wednesday (Dec. 13).
If found guilty, Apple could face a significant fine and a ban on its App Store rules, according to the report.
The investigation was triggered by a complaint from Spotify, a Swedish music streaming service, which claimed that Apple’s practices forced it to raise its subscription prices, the report said.
This move comes as part of the EU’s ongoing crackdown on Big Tech companies, per the report.
The investigation by the EU’s antitrust arm, the European Commission, has focused on Apple’s anti-steering rules, which prevent music services from directing their users to subscribe through alternative platforms, according to the report.
In response to the investigation, Apple has argued that it has already addressed any competition concerns, the report said. However, the EU is expected to make a decision on the matter early next year.
If Apple is found guilty, it could face a fine of up to 10% of its annual sales, per the report. However, EU penalties rarely reach that level, and the regulators may also order the company to change its business practices.
The European Commission has focused on Apple’s alleged stranglehold on how the App Store operates and the resulting negative impact on competition, according to the report.
In early 2022, Apple made some changes to its App Store policies, allowing music services like Spotify to direct users to the web to sign up for subscriptions, bypassing Apple’s revenue cut, the report said. Additionally, the company permitted apps to advertise lower prices for subscriptions outside of the App Store. However, Spotify argued that these changes were insufficient and merely cosmetic.
The European Commission has been actively pursuing cases against Big Tech companies, per the report. Margrethe Vestager, the EU’s antitrust czar, has a history of taking on Silicon Valley giants and has imposed significant fines on Google and ordered Apple to repay alleged unfair tax breaks.
Apple debuted its lower-cost smartphone, the iPhone 16e, Wednesday (Feb. 19), saying the product’s price starts at $599.
“We’re so excited for iPhone 16e to complete the lineup as a powerful, more affordable option to bring the iPhone experience to even more people,” Kaiann Drance, vice president of worldwide iPhone product marketing at Apple, said in a Wednesday press release.
The new model joins a smartphone lineup that includes the iPhone 15 starting at $699, the iPhone 16 starting at $799 and the iPhone 16 Pro starting at $999, according to the Apple website.
The iPhone 16e is “built for Apple Intelligence,” the company’s artificial intelligence (AI) offering, according to the release.
The smartphone also offers Apple’s A18 chip, the Apple C1 cellular modem, a 48MP Fusion camera system and a 6.1-inch display, the release said.
The Big Tech firm will accept pre-orders for the iPhone 16e in 59 countries and regions beginning Friday (Feb. 21) and will make the phone available beginning Feb. 28, per the release.
The new smartphone will cost $170 more than the iPhone SE that it replaces, Bloomberg reported Wednesday.
It also marks the biggest change in the history of the low-end iPhones that were introduced in 2016 and have not been updated in nearly three years, according to the report.
The company reported in January that during the fourth quarter — the first quarter in which it offered the iPhone 16 and Apple Intelligence — the iPhone 16 models performed stronger in markets where the AI features were available.
Apple reported a record number of iPhone upgraders during the quarter, with the iPhone 16 family outperforming the iPhone 15 family since launch. During a January earnings call, Apple CEO Tim Cook attributed this trend to a strong desire among existing customers to adopt the latest technology, with Apple Intelligence being a key factor.
The company’s installed base of active devices reached a record high of 2.35 billion during the quarter.
When Apple unveiled Apple Intelligence in September, it said the suite of AI-powered features integrates deeply into the company’s ecosystem, leveraging the technology to perform tasks ranging from text refinement to image manipulation, all while prioritizing user privacy.