Apple is appealing a $2 billion fine from the European Commission over competition laws

Apple has filed a legal challenge against a 1.8 billion euro ($1.95 billion) fine imposed by the European Commission for breaking competition rules and unfairly favoring its own music streaming service over competitors including Spotify.

Court records show that earlier this month, the US tech giant filed an appeal to the EU General Court based in Luxembourg.

Details of the content of the legal proceedings, listed as “Apple and Apple Distribution International v Commission”, are not yet publicly available. Representatives from Apple and the European Commission did not respond to requests for comment.

Apple had previously announced it would appeal the EU fine, which was handed down in March following a lengthy investigation initiated by complaints from Swedish streaming service Spotify.

At the time of the ruling, the European Commission Małgorzata Vestager said Apple “abused its dominant position” for nearly a decade by restricting rival music streaming apps from informing consumers about alternative, cheaper music services available outside the App Store.

As a result, many users paid “significantly higher prices for music streaming subscriptions” due to a high fee imposed by Apple on developers, which was then passed on to users, the commission said.

Apple has always vehemently denied these claims, arguing that EU investigators “failed to uncover any credible evidence of consumer harm.” The commission’s decision “ignores the realities of a market that is thriving, competitive and rapidly growing,” the technology company said in a statement two months ago.

The nearly $2 billion fine was imposed as part of an ongoing EU-wide effort to rein in the global dominance of big tech companies through heavy financial penalties and regulatory measures.

In March, just days after Apple received a fine, new EU rules came into force regulating how Europe’s largest online platforms operate under the Digital Markets Act (DMA).

The DMA requires the six tech giants designated by the European Commission as “gatekeepers” – Apple, Google’s parent company Alphabet, Amazon, TikTok owner ByteDance, Meta and Microsoft – to follow a range of rules, including not favoring internal services over third-party providers.

These rules can be enforced through fines of up to 20% of total worldwide turnover (i.e. gross revenues) or, in extreme cases, the ‘last resort’ option of compulsory divestment and company break-up.

In response, companies such as Apple have changed the way they operate in the 27-member EU bloc, allowing European users to download competing app stores and lowering the fees they charge developers for purchases made on the App Store.

However, Apple’s plans to charge a “core technology fee” of 0.50 euros ($0.54) per year for the use of App Store alternatives to more than 1 million users per year have drawn sharp criticism from many European companies, including Spotify and Deezer.

On March 25, the EU announced that it was investigating Apple, Meta and Alphabet for potential violations and failure to comply with the terms of the DMA.

Apple’s legal challenge against the Commission’s $1.95 billion fine opens another front in its battle with EU regulators. The tech company has already had some success at the General Court, the European Union’s second-most important court that hears cases brought by companies against the Commission.

In 2020, EU judges overturned an earlier commission ruling that Apple had failed to pay €13 billion in taxes to the Irish government. This case then went to the European Court of Justice and is still slowly moving through the legal procedure.

Apple’s latest legal battle could be equally protracted, taking several years before the Court issues any ruling that can also be appealed.