EU Charges Apple Over App Store ‘Monopoly’

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European Commission says Apple breaches EU competition law by levelling ‘high’ fees on music streaming services while promoting its own competing app

The European Commission has charged Apple with violating antitrust rules over its App Store rules for music streaming services.

EU competition commissioner Margrethe Vestager told a press conference that Apple effectively has a “monopoly” on music services for Apple devices.

The Commission launched a competition investigation into Apple last year following a complaint by music service Spotify in 2019.

Spotify said Apple’s fee of 30 percent on all subscription fees through the App Store was “limiting choice and stifling innovation”.

EU competition commissioner Margrethe Vestager.  European Commission
Margrethe Vestager.  Image credit: European Commission

‘Apple tax’

The Commission said late on Friday that it took issue with the “mandatory use of Apple’s own in-app purchase mechanism” imposed on music streaming services in the App Store.

Epic Games, which makes the popular Fortnite game, is also locked in a legal battle with Apple over the mandatory use of Apple’s in-app purchase system.

The Commission also said it was concerned that app developers are not allowed to inform users of alternate ways to purchase the same apps elsewhere.

“Apple’s rules distort competition in the market for music streaming by raising the costs of competing music streaming app developers,” the Commission said in a statement.

“This in turn leads to higher prices for consumers for their in-app music subscriptions on iOS devices.”

Some irate developers have termed their App Store charges the ‘Apple tax’.

Apple said in response that it receives no commission on 99 percent of Spotify’s subscriptions.

The company said “no store in the world” allows developers to “advertise alternative deals” on their apps.

‘Opposite of fair competition’

“Once again, they want all the benefits of the App Store but don’t think they should have to pay anything for that,” Apple stated. “The Commission’s argument on Spotify’s behalf is the opposite of fair competition.”

Spotify said it welcomed the findings.

“The European Commission’s Statement of Objections is a critical step toward holding Apple accountable for its anticompetitive behavior, ensuring meaningful choice for all consumers and a level playing field for app developers,” said Spotify chief legal officer Horacio Gutierrez in a statement.

Deezer chief content and strategy officer Alexander Holland also said the findings were an “important step” toward more innovation.

Vestager said it was problematic that Apple acts as a “gatekeeper” to users of Apple devices while also offering Apple Music, which competes with apps such as Spotify or Deezer.

‘Consumers losing out’

“This significant market power cannot go unchecked as the conditions of access to the Apple App Store are key for the success of app developers,” she told journalists.

Vestager said on Twitter that the Commission’s preliminary conclusion was that Apple is “in breach of EU competition law”.

“Apple Music competes with other music streaming services. But Apple charges high commission fees on rivals in the App Store and forbids them to inform of alternative subscription options,” she wrote. “Consumers are losing out.”

E-commerce firm Rakuten filed a complaint against Apple in March 2020 alleging Apple’s commission on e-books sold through the App Store was anti-competitive, while Apple promotes its own Apple Books service.

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