European Commission accuses Apple of anti-competitive practices after Spotify complaint. Brussels complains that the technology company applies abusive conditions and fees on App Store apps. Spotify was the first to point out the disadvantages that could result in million-dollar penalties against Apple.
The European Commission accuses Apple of anti-competitive practices by applying abusive fees through its App Store that penalizes companies such as Spotify. Brussels considers that the technology company is exercising a dominant position that could lead the Commission to impose fines in the millions of dollars, with amounts of around 10% of its turnover (11 billion dollars if we take into account its last balance sheet).
To reach this conclusion, Europe has developed an investigation of more than a year that began, precisely, following a complaint filed by Spotify. It has been the European Commissioner for Competition, Margrethe Vestager, who has reported on the accusation: “Our preliminary conclusion is that Apple violates EU competition law. Apple Music competes with other streaming services, but its parent company charges high fees to rivals in its App Store and prohibits them from informing about alternative subscription options. Consumers lose out.
As Vestager explains, Apple enforces its dominant position through its App Store, where it controls the entire ecosystem of apps that can be accessed. A service, by the way, which has updated this week with a new privacy feature by which users choose whether or not to share their data with certain applications, another measure that has caused discomfort in certain providers such as Facebook, which have accused the company chaired by Tim Cook, precisely, of monopolistic practices.
And this is also another episode in the battle between Spotify and Apple. In the latest data recorded, for the first time, the first company has surpassed the second in downloads. In addition, both have launched premium podcast services within a week of each other. It is precisely in the area of commissions that Spotify defends one of the advantages, as it will not charge its creators for the first two years, while Apple imposes fees of between 15 and 30%.
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
According to the European Commission in its preliminary opinion, Apple sets a commission of up to 30% in the subscription fees of digital platforms that it passes on to the end customer or the applications, denying a competitive system on equal terms to that for Apple Music. In that sense, Brussels points out that users are paying a surcharge on the music downloads they make within the App Store, something they could avoid with operations outside the platform, although in no case are they visibly offered this alternative.
For the moment, the EU executive has already sent the list of charges of which it accuses Apple, noting that it is concerned “that it applies certain restrictions to application developers that prevent them from informing iPhone or iPad users about cheaper options”, as the institution states in a statement in which Apple is defined as “Guardian”, a term used to refer to companies that generate enormous power over the markets.