March 4. 2024. 11:07

The Daily

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EU Commission halves charges against Apple in competition probe

The European Commission has issued a rare revision of its initial findings in a competition inquiry looking at Apple’s App Store practices, dropping half of the original charges.

The EU executive’s competition department on Tuesday (28 February) issued a clarifying statement of objections to the tech giant following the initial presentation of its concerns in 2021.

The inquiry concerns a long-standing complaint from music-streaming giant Spotify, which contends that the iPhone maker prevents it from informing users about how to subscribe to its service outside the App Store, where Apple gets a significant percentage.

In 2019 Spotify filed a complaint before the EU’s antitrust authority, accusing Apple of limiting user choice and the flexibility of audio-streaming services to the benefit of its own platform, Apple Music.

The following investigation focused on the terms set by Apple for developers of music-streaming apps when it comes to their distribution on the App Store, with the remaining charge concerning the company’s anti-steering provisions, which prevent users from being informed of alternative and cheaper off-app payment options.

Spotify files EU antitrust complaint against Apple

Spotify has filed a complaint with EU antitrust regulators against Apple, saying the iPhone maker unfairly limits rivals to its own Apple Music streaming service.

EU antitrust authorities issued the initial statement of objections, the first step to open a formal antitrust investigation, almost two years ago and after a preliminary investigation, the competition body identified two issues.

The first was that no alternative to Apple’s own in-app purchasing system was offered to the developers of music streaming apps when it came to distribution on the App Store.

The second was that certain restrictions were applied to app developers preventing them from informing iPhone and iPad users of alternative and potentially cheaper purchasing options.

The Commission has sent a follow-up statement clarifying that it no longer holds any position on the first point concerning the legality of the in-app purchasing obligation.

Instead, it is focused solely on the second element, the conditions it regards as constituting an abuse of the company’s dominant market position and, therefore, a breach of EU law.

For the EU antitrust enforcer, these anti-steering obligations are ‘neither necessary nor proportionate’ for the provision of the App Store, are detrimental to users who, as a result, end up paying more, and negatively impact music streaming app developers by limiting consumer choice.

“We’re pleased that the Commission has narrowed its case and is no longer challenging Apple’s right to collect a commission for digital goods and require the use of the In-App Payment systems users trust,” an Apple spokesperson said.

“The App Store has helped Spotify become the top music streaming service across Europe, and we hope the European Commission will end its pursuit of a complaint that has no merit.”

Eve Konstan, Spotify’s General Counsel, however, said, “Today, the European Commission sent a clear message that Apple’s anti-competitive behavior and unfair practices have harmed consumers and disadvantaged developers for far too long.”

“We urge the Commission to reach a swift decision in this case to protect consumers and restore fair competition on the iOS platform”, she added.

While the shift marks a temporary win for Apple, which now has one less charge to fight, app stores are under the remit of the recently adopted Digital Markets Act, which will require Apple to open the door to alternative app stores.

Apple’s rivals have already taken proactive measures in these areas. Google, for instance, introduced a new in-app purchasing policy on the Google Play store last July, allowing the developers of non-gaming apps within the European Economic Area to offer alternative billing systems, exempting them from the 3% cut taken by the company.