Apple is in the EU’s crosshairs once again.
The European Commission has charged the iPhone maker with breaking antitrust laws by imposing unfair rules on distributing apps via the App Store.
The EU’s executive arm accused Apple of abusing its market power in two ways: forcing developers to use Apple’s own in-app payment system — which gives the tech giant a 30% cut — and banning them from informing customers about alternative subscription options. The latter rule
EU antitrust czar Margrethe Vestager said the restrictions meant consumers were losing out:
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.
The EU’s case stems from a 2019 complaint by Spotify, which accused Apple’s of distorting competition with its fees.
In a statement, Spotify’s chief legal officer, Horacio Gutierrez, said he welcomed the EU’s response:
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 anticompetitive behavior, ensuring meaningful choice for all consumers and a level playing field for app developers.
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
Apple fired back at Spotify, saying the App Store had played a key role in the streaming giant’s rise:
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.
The case still has a long way to go. The preliminary findings will now move through the courts, and Apple will likely appeal any verdict.
If found guilty, Apple could face a fine of up to 10% of its global turnover, which could reach $27 billion based on the firm’s revenue last year. However, the Silicon Valley giant can take some confidence from previous battles with the EU. Last year, the bloc’s second-highest court overruled an order for the company to pay $14.9 billion in back taxes to Ireland.