Tech Titan Apple Inc. is set to face a European Union antitrust complaint as soon as this week, over concerns about the company’s App Store practices. This move is an investigation into Spotify Technology SA’s allegations that App Store rules are unfair. The European Commission has been investigating whether Apple has broken EU competition rules with its App Store policies, following Spotify’s initial complaint back in 2019 over Apple’s 30 percent cut on subscriptions.
The European Commission opened up two antitrust investigations into Apple’s App Store and Apple Pay practices last year, and this new move raises the risk that the EU could order changes to Apple’s App Store or impose fines.
Spotify complained in 2019 that Apple unfairly squeezes its music streaming service with ever-changing rules and a large sales commission on the app store. It has said it was forced to “artificially” increase monthly subscriptions for its premium service to cover the extra costs. It also claimed Apple uses its App store to stifle innovation and limit consumer choice in favor of its own Apple Music service.
The EU is also probing Apple over e-books and payments, following Rakuten’s similar complaint in 2020 that it is anti-competitive for Apple to take a 30 percent commission on eBooks sold through the App Store while promoting its own Apple Books service. Epic Games also filed an antitrust complaint with the EU earlier this year, as part of its ongoing dispute with Apple. The Fortnite developer has publicly criticized Apple’s App store policies around distribution and payments, resulting in Epic attempting to circumvent Apple’s 30% cut on in-app purchases in Fortnite. Apple quickly removed the game from its App store, prompting a legal battle, which is still in progress.
Apple’s regulatory woes have intensified in recent months as software developers criticize the levies Apple and Alphabet Inc.’s Google charge outside developers for using their digital distribution platforms. Known as the “Apple tax,” this 30 percent cut has long been targeted by companies like Netflix and Spotify. Apple has defended its policies, arguing that the revenue it earns contributes toward the costs of maintaining the App Store and enforcing its content, privacy, and security guidelines.
Despite Apple’s defense of its App Store, the iPhone-maker has already sought to ease pressure from regulators and developers with App Store policy changes over the past year. Apple now allows some video streaming apps to bypass the App Store, and it has reduced its App Store commission rate to 15 percent for any developer that earns less than $1 million in annual revenue.
However, these changes alone haven’t been enough to ease the fears of EU regulators, and we’ll find out later this week exactly how the European Union will respond to one of the United States’ biggest tech companies. Apple will have the chance to argue its case against any EU suspicions before regulators take a final decision.
Apple declined to comment on the EU probe, instead referring to a 2019 blog post where it said Spotify was trying to keep “substantial revenue that they draw from the App Store’s customers, without making any contributions to that marketplace.” The European Commission also declined to comment, and Spotify didn’t immediately respond to a request for comment.
© Folajimi Anisulowo