The EU accused the Apple of unfairly shutting out music-streaming rivals on its platforms in handing down the fine. AFP
The EU accused the Apple of unfairly shutting out music-streaming rivals on its platforms in handing down the fine. AFP
The EU accused the Apple of unfairly shutting out music-streaming rivals on its platforms in handing down the fine. AFP
The EU accused the Apple of unfairly shutting out music-streaming rivals on its platforms in handing down the fine. AFP

Business

Technology

Apple to appeal against $2bn EU antitrust fine over Spotify case

iPhone maker accuses Spotify of trying to 'rewrite the rules of the App Store'

The National

March 04, 2024

  • English
  • Arabic

Apple said it would appeal a $2 billion fine from Brussels after the European Commission imposed its first antitrust penalty on Monday, in which it accused the iPhone maker of unfairly shutting out music-streaming rivals on its platforms.

The EU opened the investigation following a 2019 complaint filed by Spotify over the restrictions as well as Apple's 30 per cent commission fees on the App Store.

The commission said its investigation had found Apple bans music-streaming app developers such as Spotify from informing iOS users about cheaper music services outside the App Store.

“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store,” European Competition Commissioner Margarethe Vestager said in a statement.

The commission said it had added a lump sum of $2 billion to act as a deterrent to Apple, and because a significant amount of the harm caused was non-monetary.

In addition, the fine must be sufficient to deter Apple from repeating the present or a similar infringement; and to deter other companies of a similar size and with similar resources from committing the same or a similar infringement, the commission said.

Apple has also been ordered to remove its anti-steering provisions and to refrain from repeating the infringement in the future.

The California-based company said it plans to appeal the fine, arguing the commission's investigation did not find evidence of anticompetitive behaviour.

Apple accused Spotify of wanting to “rewrite the rules of the App Store” in a way that favours them.

It also said Spotify does not pay Apple anything for being on the App Store, and that Apple does not collect commission on Spotify subscriptions purchased on the Spotify website.

Spotify celebrated the decision and said the commission is “putting customers first” by imposing the fine on Apple.

“This decision sends a powerful message – no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers,” Spotify said in a statement.

How Tesla’s price correction has hit fund managers

Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.

It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.

The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.

Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.

Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.

He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.

AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”

A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.

Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.

Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.

Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.

By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.

Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.

In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”

Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.

She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.

Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.

Profile of Tamatem

Date started: March 2013

Founder: Hussam Hammo

Based: Amman, Jordan

Employees: 55

Funding: $6m

Funders: Wamda Capital, Modern Electronics (part of Al Falaisah Group) and North Base Media

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The Bio

Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”

Holiday destination: “I like Paris very much, it’s a city very close to my heart.”

Book: “Das Kapital, by Karl Marx. I am not a communist, but there are a lot of lessons for the capitalist system, if you let it get out of control, and humanity.”

Musician: “I like very much Fairuz, the Lebanese singer, and the other is Umm Kulthum. Fairuz is for listening to in the morning, Umm Kulthum for the night.”

While you're here
MATCH INFO

Hoffenheim v Liverpool
Uefa Champions League play-off, first leg
Location: Rhein-Neckar-Arena, Sinsheim
Kick-off: Tuesday, 10.45pm (UAE)

Evacuations to France hit by controversy
  • Over 500 Gazans have been evacuated to France since November 2023
  • Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
  • The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
  • Artists and researchers fall under a programme called Pause that began in 2017
  • It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
  • Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
  • Unlike students, they are allowed to bring their families to France
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MOST%20POLLUTED%20COUNTRIES%20IN%20THE%20WORLD
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Company profile

Name: Dukkantek 

Started: January 2021 

Founders: Sanad Yaghi, Ali Al Sayegh and Shadi Joulani 

Based: UAE 

Number of employees: 140 

Sector: B2B Vertical SaaS(software as a service) 

Investment: $5.2 million 

Funding stage: Seed round 

Investors: Global Founders Capital, Colle Capital Partners, Wamda Capital, Plug and Play, Comma Capital, Nowais Capital, Annex Investments and AMK Investment Office  

Updated: March 04, 2024, 5:54 PM`
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