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CEO Tim Cook speaks at an Apple event at the company’s headquarters in Cupertino, Calif., September 10, 2019.
Stephen Lam | Reuters
LONDON – Apple has “abused its dominant position” in the distribution of music streaming applications through its App Store, the European Commission said on Friday.
“The European Commission has informed Apple of its preliminary opinion that it is distorting competition in the music streaming market by abusing its dominant position for the distribution of music streaming applications through its App Store,” he said. in a “statement of objections” sent to Apple.
The European Commission, the EU’s executive arm, opened an antitrust investigation into the App Store last year, after music streaming platform Spotify complained in 2019 about Apple’s licensing agreements. This means that app developers have to pay a 30% commission on all subscription fees that go through the App Store.
On Friday, the EU said it disagreed with “the mandatory use of Apple’s in-app purchase mechanism imposed on developers of music streaming apps to distribute their apps through the Apple App Store. Apple “.
Application developers are also unable to inform users of other ways to purchase the same applications elsewhere – another issue of concern to the Commission.
In response, Apple said the EU case was “the opposite of fair competition,” according to a statement quoted by Reuters.
“Spotify has grown into the world’s largest music subscription service, and we’re proud of the role we’ve played in that regard,” Apple said in the statement. “Again, they want all the benefits of the App Store but don’t think they have to pay anything for it.”
An e-book and audiobook distributor also filed a lawsuit against Apple in March 2020 over similar concerns, while Epic Games – which is already locking Apple’s horns in a U.S. legal battle – filed an antitrust complaint against the iPhone maker to the European Commission earlier. this year.
Apple was not immediately available for comment when contacted by CNBC.
EU competition policy manager Margrethe Vestager said app stores play a “central role” in today’s digital economy.
“Our preliminary finding is that Apple is a gatekeeper for iPhone and iPad users through the App Store. With Apple Music, Apple also competes with music streaming providers,” she said. Friday in a statement.
“By setting tough rules on the App Store that put competing music streaming services at a disadvantage, Apple is depriving users of cheaper music streaming choices and skewing the competition. This is done by charging competitors high commissions on every transaction in the App Store and prohibiting them from informing their customers of alternative subscription options, ”she added.
This is not the first investigation that the European Commission has carried out against Apple. The committee decided in September to sue Apple and the Irish government before the highest court in the European Union for what Brussels considers unfair tax practices.
The EU decided in 2016 that Apple should reimburse 13 billion euros ($ 15.7 billion) in unpaid taxes to the Irish government, after the latter granted “undue tax advantages”. Apple and the Irish government have challenged the ruling and the case is still in court.
Hoping to overcome long legal battles and make its markets fairer, the European Union is working on new regulations that could ultimately impact many US tech giants.
The digital markets law will likely put an end to so-called self-preference – when, for example, search results for apps in an Apple product prioritize those developed by the tech giant. technology. The idea is to give small app developers the same chance to be found and chosen by consumers.
The legislation is still under discussion by European lawmakers. But, in addition to imposing practical changes, it will also have the power to impose fines on companies up to 10% of their annual global turnover.
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