Music streaming

EU says Apple App Store violates competition rules with streaming music

The European Commission said on Friday that Apple had abused its dominant position in music streaming apps through its App Store.

The commission statement cites the mandatory use by app developers of Apple’s in-app purchasing system which charges developers up to a 30% commission fee on all subscriptions purchased through the app, as well as Apple’s “anti-leadership provisions” that prevent app developers from notifying users. alternative purchasing possibilities outside of the applications.

“Now we can shop, access news, music or movies through apps instead of visiting websites. Our preliminary conclusion is that Apple is a gatekeeper for iPhone and iPad users through the App Store, ”said Margrethe Vestager, executive vice president of the Antitrust Enforcement Commission, in a statement. communicated.

“With Apple Music, Apple also competes with music streaming providers. By setting tough rules on the App Store that put competing music streaming services at a disadvantage, Apple is depriving users of cheaper music streaming choices and skewing the competition.

The commission said its preliminary view is that Apple’s rules distort competition in the music streaming market, which in turn results in higher prices for consumers for their in-app music subscriptions on iOS devices. .

If the preliminary findings are upheld, Apple could face fines or be forced to change some of its business practices. The timeline of the process is unknown.

The statement of objections regarding the dominance of Apple Music follows a complaint filed by the music streaming app Spotify.

Apple said that “the commission’s argument on behalf of Spotify is the opposite of fair competition.”

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

The company said Spotify does not pay Apple commission on “over 99% of their subscribers” and only pays a 15% commission on the remaining subscribers they get through the App Store.

“At the heart of this matter is Spotify’s demand that they should be able to advertise alternative offers on their iOS app, a practice that no store in the world allows. Again, they want all the benefits of the App Store but don’t think they should have to pay anything for it, ”Apple’s statement continues.

Spotify applauded the commission’s statement.

“Ensuring that the iOS platform functions properly is an urgent task with far-reaching implications. The European Commission’s Statement of Objections is 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, ”said Horacio Gutierrez, Head of Global Affairs and General Counsel of Spotify. A declaration.

Gutierrez was among the executives of app companies who testified last week at a Senate Judiciary Committee antitrust hearing on the market power of app stores.

He and other app executives accused Apple of anti-competitive practices.

Gutierrez said Apple threatened to ban Spotify from the App Store in 2013 unless it incorporated in-app payments that would subject Spotify to a 30% commission fee.

Apple then launched its own streaming service, Apple Music.

In addition to the scrutiny of regulators and lawmakers in the United States and beyond, Apple is also preparing for an antitrust lawsuit that will begin next week in federal court in California.

Epic Games, developer of the popular game Fortnite, is suing Apple over allegations of anti-competitive behavior after the game was kicked from Apple’s App Store in August after Epic Games set up a payment system to attempt to bypass the 30 percent commission fee.

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