Music streaming

EU hits Apple with music streaming fees to boost Spotify

  • EU says Apple is distorting competition in music streaming
  • The preliminary conclusion is a victory for Spotify
  • Apple says EU view is “the opposite of fair competition”

BRUSSELS, April 30 (Reuters) – European regulators on Friday accused Apple (AAPL.O) of having distorted competition in the music streaming market, siding with Spotify (SPOT.N) in a case that could lead to a hefty fine and changes in the iPhone manufacturer’s Profitable Business Practices.

The preliminary findings mark the first time that Brussels has brought anti-competitive charges against Apple, although the two sides have had violent clashes in the past, including a multibillion-dollar tax dispute involving Ireland.

Apple, Spotify and other parties can now respond. If the case is pursued, the EU could demand concessions and potentially impose a fine of up to 10% of Apple’s global revenue – up to $ 27 billion, though it rarely levies the maximum sanction.

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Apple has found itself in the crosshairs of the European Commission after Sweden-based Spotify complained two years ago that the US tech giant was unfairly limiting its rivals to its own music streaming service Apple Music on iPhone.

The EU competition authority, in its so-called statement of objections setting out the charge, said the issue was related to Apple’s restrictive rules for its App Store that require developers to use its own system. checkout and prevent them from informing users of other purchasing options.

EU Competition Commissioner Margrethe Vestager said there were clear signs that Apple’s app store rules were affecting the business development of music streaming competitors and more broadly affecting app developers.

“They (application developers) depend on the Apple App Store as a gatekeeper to access Apple iPhone and iPad users. This important market power cannot go unchecked because the conditions of access in the Apple App Store are the key to the success of application developers, ”she told a press conference.

Vestager said Apple should end the restrictive practices and refrain from doing anything that could duplicate them.

She also said other authorities were looking into the matter.

“We have contacts with other jurisdictions that are dealing with similar cases, which could be the Dutch, the Australians, the Americans,” she said, adding that she was also interested in the gaming market. applications, even if this was just the beginning.

Apple has pushed back the charges from the EU.

A 3D printed Apple logo is visible in front of a European Union flag displayed in this illustration taken on September 2, 2016. REUTERS / Dado Ruvic / Illustration / File Photo

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“Spotify has grown into the world’s largest music subscription service, and we’re proud of the role we’ve played in it,” he said in a statement.

“They want all the benefits of the App Store but don’t think they should have to pay anything for it. The Commission’s argument on behalf of Spotify is the opposite of fair competition,” said he added.

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Spotify hailed the EU move, describing it as “a crucial step in holding Apple accountable for its anti-competitive behavior, ensuring meaningful choice for all consumers and a level playing field for app developers.”

Reuters was the first to report the impending EU antitrust charge in March.

Spotify, one of the few global consumer technology success stories in Europe, is the market leader in music streaming with 356 million active users and 158 million paying subscribers.

Apple Music, which launched more recently in 2015, is said to have more than 70 million subscribers, although the company does not give a separate figure for this part of its business.

Competition between the two companies has intensified in recent weeks, with both seeking to grow their customer base through supremacy in the podcast market.

“European consumers expect and deserve to have access to a full range of music streaming services without their choices being restricted or prices being unfairly inflated by the gatekeepers of the Internet,” said the European consumer organization. BEUC.

The EU accusation comes a week before Apple confronted Epic Games in a US antitrust lawsuit following a lawsuit brought by the creator of “Fortnite” alleging that Apple had abused its dominance over the mobile applications market.

Epic has filed a complaint with the Commission on the same issues.

Last month, the UK’s Competition and Markets Authority opened an investigation into Apple after the iPhone maker’s terms and conditions for app developers were unfair.

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Reporting by Foo Yun Chee; edited by Philip Blenkinsop

Our Standards: Thomson Reuters Trust Principles.


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