April 13, 2021

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EU ‘poised to accuse Apple of anti-competitive behaviour in Spotify dispute’ for the first time

3 min read

The European Commission is set to accuse Apple of unfairly promoting its own music streaming service in a series of antitrust charges for the first time, according to reports.

The European Union could present the technology giant with an antitrust charge sheet within the next few weeks, two years after rival Spotify accused it of behaving unlawfully to “disadvantage competitors”.

Spotify claimed Apple had abused its dominance in the App Store to favour its own Apple Music streaming platform in its complaint lodged to the Commission last year, accusing the company of “tilting the playing field to disadvantage competitors”.

Apple charges digital content providers a 30 per cent fee for using its payment system for subscriptions sold in its App Store, a rule that does not apply to its own Apple Music service.

It opened an investigation in June last year, alongside another complaint centred around whether Apple’s contactless payment system, Apple Pay, violates EU competition rules.

The EC could send its statement of objections outlining the suspected violations of its antitrust rules before the summer, including explaining whether it feels a fine is merited and what must be done to prevent any anti-competitive behaviour, according to Reuters.

Apple referred i to a statement it released in March 2019, claiming that Spotify “wants all the benefits of a free app without being free”.

“Apple connects Spotify to our users. We provide the platform by which users download and update their app. We share critical software development tools to support Spotify’s app building. And we built a secure payment system — no small undertaking — which allows users to have faith in in-app transactions. Spotify is asking to keep all those benefits while also retaining 100 percent of the revenue,” the company said.

“Spotify wouldn’t be the business they are today without the App Store ecosystem, but now they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that’s wrong.”

EU ‘poised to accuse Apple of anti-competitive behaviour in Spotify dispute’ for the first time
Apple said it was looking forward to working with the CMA (Photo: AFP)

Apple announced it was slashing the App Store commission rate for developers who take less than $1m (£720,000) in annual net sales on its platform from 30 per cent to 15 per cent in November last year.

Apple is also facing a separate investigation by the UK’s competition watchdog in relation to complaints that the iPhone maker’s terms are unfair for app developers.

The Competition and Markets Authority’s (CMA) investigation will consider whether Apple has a dominant position for distributing apps to its devices in the UK, and if it imposes unfair or anti-competitive terms on developers by charging them up to 30 per cent on the value of transactions made on the apps, ultimately leaving consumers with less choice or with products that are priced higher.

“We created the App Store to be a safe and trusted place for customers to download the apps they love and a great business opportunity for developers everywhere. In the UK alone, the iOS app economy supports hundreds of thousands of jobs, and any developer with a great idea is able to reach Apple customers around the world,” an Apple spokesperson said.

“We believe in thriving and competitive markets where any great idea can flourish. The App Store has been an engine of success for app developers, in part because of the rigorous standards we have in place — applied fairly and equally to all developers — to protect customers from malware and to prevent rampant data collection without their consent. We look forward to working with the UK Competition and Markets Authority to explain how our guidelines for privacy, security and content have made the App Store a trusted marketplace for both consumers and developers.”

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