By Taylor Telford
Apple is facing antitrust charges in Europe for allegedly abusing its ’dominant position’ in music streaming distribution to choke competition in its App Store, regulators announced Friday.
The European Commission said that Apple's rules "distort competition" in the market for music streaming services by raising the costs of competing app developers. Regulators pointed to Apple's mandated use of its in-app purchase system (from which the tech giant takes a 30 percent commission, known informally as the "Apple Tax") and to "antisteering provisions" that limit app developer's ability to tell users about alternate purchasing options, which are usually cheaper.
"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," Margrethe Vestager, executive vice president of the European Commission, said in a statement. "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 case dates back to a 2019 complaint from streaming giant Spotify, and comes as Apple is poised to take the stand over similar complaints from Epic Games, the maker of Fortnite. Epic has accused Apple of using its control of its mobile operating system to stymie competition. Apple kicked Fortnite off the App Store last year after the video game maker offered an alternative payment option to its customers, bypassing the mandatory 30 percent commission charged by Apple.
The trial, which kicks off Friday, will determine whether Apple's control over iOS is a monopoly, and whether Apple can use that control to force developers to use the App Store and its payment system.
Apple did not immediately respond to request for comment from The Washington Post.
Apple has argued that its tight control over iOS is necessary to keep the system secure and to protect the privacy of its users. Apple says it vets every app allowed on the App Store for malware and that the commissions it charges for digital payments go to funding the App Store, which provides tools that help developers build software for iOS.
But in the charge sheet, the executive arm of the EU argued that Apple exploits the "closed ecosystem" formed by its devices and software for more than a billion users worldwide.
"The App Store is the sole gateway to consumers using Apple's smart mobile devices," the charge sheet states. "The Commission found that users of Apple's devices are very loyal to the brand and they do not switch easily. As a consequence, in order to serve iOS users, app developers have to distribute their apps via the App Store, subject to Apple's mandatory and non-negotiable rules."
If Apple is found to be in violation after pleading its case before the EU's executive arm, it could be fined as much as 10 percent of its annual revenue (it took in nearly $90 billion in revenue last quarter) and potentially have to alter its business practices.
The Washington Post