Apple’s App Store Found to be in Breach of Competitive Law by EU, Faces Charge Sheet
Apple has been found to be in breach of competitive law by the European Union. The EU has stated that Apple has market dominance over competitors, with regards to the advantages Apple Music has over apps such as Spotify. Apple will face a charge sheet from the EU, relating back to an antitrust complaint from Spotify two years ago.
Today, the European Commission has released a statement stating that Apple “has “abused its dominant position for the distribution of music streaming apps through its App Store.” The commission has found that Apple’s App Store policies give the company an unfair advantage. Apple has formally been notified of this conclusion, according to the statement.
In the statement, 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.”
The EU had been investigating Apple’s App Store policies following a complaint filed by Spotify two years ago. Apple poses a 30 percent commission on all subscription fees that are made through the App Store from third-party developers. At the time, Spotify stated that Apple’s commission fees forced the company to charge users $12.99 USD for its Premium plan just to get its usual $9.99 USD cut. Spotify then claimed the policy gave Apple an unfair advantage as Apple Music subscriptions cost $9.99 USD.
The EU is expected to issue Apple a charge sheet by the summer of this year. Earlier, it was expected that the EU would charge Apple this week. It’s currently not clear whether Apple will face a fine or if mandatory changes to its App Store policies in Europe will be laid out.