The European Commission has issued monopoly charges against Apple due to concerns about the practices of the App Store.
And thehave found The Commission said that Apple had violated competition rules in the European Union with its app store policies, after an initial complaint with Spotify in 2019.
The Commission believes that Apple has a dominant market position to distribute music streaming apps through the App Store.
The European Union focused on two rules that Apple imposes on developers:
- Mandatory use of Apple’s in-app purchase (which charges them a 30 percent discount).
- Prevent app developers from informing users of other purchase options outside of apps.
The panel found that the 30 percent commission fee, or Apple tax as it is often referred to, pushed up prices for consumers.
According to the European Commission, most of the broadcasting service providers passed these fees on to users by raising the prices.
“Apple’s rules distort competition in the market for streaming music services by increasing costs for competing music streaming app developers,” says a statement from the European Union.
The European Union also sent Apple a statement of objections, which is essentially a list of how the commission believed the company had violated competition rules.
This is the formal initial stage of antitrust action against Apple, and the company has the opportunity to respond to the Commission’s list of objections.
Apple faces a fine of up to 10 percent of its annual revenue if found guilty of violating European Union rules, which could reach $ 27 billion based on its annual revenue of $ 274.5 billion last year.
Apple may also have to change its business model, which has harmful and lasting effects more than a fine.
Spotify welcomed the initial accusations, saying: Ensuring that the iOS platform works fairly is an urgent task with far-reaching implications.
She added: The statement of objections by the European Commission is a critical step towards holding Apple accountable for its anti-competitive behavior, ensuring a meaningful choice for all consumers and a level playing field for app developers.
Apple said in a statement: Spotify has become the largest music subscription service in the world. Spotify pays us no commission on more than 99 percent of its subscribers, and it pays a 15 percent commission on the remaining subscribers who received it through the app store.
She added: The essence of this issue is Spotify’s request that it should be able to announce alternative deals via its iOS app, a practice that no store in the world allows, and it wants all the benefits of the app store without paying anything for it.
The iPhone manufacturer has relaxed some of its policies over the past year as the voices of opposition against the App Store have grown.
Apple is now allowing some video streaming apps to bypass the App Store commission, and has lowered the App Store commission rate to 15 percent for any developer earning less than $ 1 million in annual revenue.
Our preliminary conclusion: @Apple is in breach of EU competition law. @AppleMusic compete with other music streaming services. But @Apple charges high commission fees on rivals in the App store & forbids them to inform of alternative subscription options. Consumers losing out.
– Margrethe Vestager (@vestager) April 30, 2021