Apple charged with breaking EU competition rules over in-app payments
30 April 2021, 15:14
It follows a European Commission investigation sparked by a complaint from Spotify.
Apple has been accused of breaking EU competition rules by abusing its dominant position in the music streaming market with App Store rules on in-app payments.
In a statement of objections sent to the tech giant, the European Commission took issue with Apple forcing other music streamers using the App Store to process in-app payments through Apple’s own system, from which the firm takes a commission.
The EU said these rules “distorted competition” because other apps were trying to compete with the Apple Music streaming platform.
The case comes after fellow music streaming giant Spotify lodged a complaint, which led to the commission opening an investigation last year.
Apple has the chance to reply to the EU’s objections in writing and to request an oral hearing to present its case.
Our preliminary conclusion: @Apple is in breach of EU competition law. @AppleMusic compete with other music streaming services. But @Apple charges high commission fees on rivals in the App store & forbids them to inform of alternative subscription options. Consumers losing out.
— Margrethe Vestager (@vestager) April 30, 2021
The company could face a large fine and be forced to change its policies if it fails to convince regulators.
The commission said it was concerned that Apple applied restrictions on app developers which prevented them from informing iPhone and iPad users of alternative and potentially cheaper choices.
European Commission executive vice-president Margrethe Vestager said: “App stores play a central role in today’s digital economy.
“We can now do our shopping, access news, music or movies via apps instead of visiting websites.
“Our preliminary finding is that Apple is a gatekeeper to users of iPhones and iPads via the App Store. With Apple Music, Apple also competes with music streaming providers.
“By setting strict rules on the App Store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition.
“This is done by charging high commission fees on each transaction in the App Store for rivals and by forbidding them from informing their customers of alternative subscription options.”
Spotify’s head of global affairs and chief legal officer Horacio Gutierrez said: “Ensuring the iOS platform operates fairly is an urgent task with far-reaching implications.
“The European Commission’s statement of objections is a critical step toward holding Apple accountable for its anti-competitive behaviour, ensuring meaningful choice for all consumers and a level playing field for app developers.”
In response to the European Commission, Apple said: “Spotify has become the largest music subscription service in the world, and we’re proud for the role we played in that.
“Spotify does not pay Apple any commission on over 99% of their subscribers, and only pays a 15% commission on those remaining subscribers that they acquired through the App Store.
“At the core of this case is Spotify’s demand they should be able to advertise alternative deals on their iOS app, a practice that no store in the world allows.
“Once again, they want all the benefits of the App Store but don’t think they should have to pay anything for that. The Commission’s argument on Spotify’s behalf is the opposite of fair competition.”
