Apple has been accused of breaking EU competition law resulting in customers paying 30% more for products in its App Store.
The European commissioner for competition, Margrethe Vestager, said that Apple had abused its position as a “gatekeeper” to distort competition in the music streaming market.
Vestager said the 30% commission it charges developers, and the strict rules developers have to adhere to, are unfair.
“Apple charges a 30% commission fee for all purchases throughout its system,” said Vestager. “This means that music streaming providers cannot sell subscriptions on their apps without paying a 30% fee to Apple. Our investigation showed that this fee was passed on to end users by raising prices typically from €9.99 to €12.99.”
“A second concern is about the so-called anti-steering provisions,’” Vestager added. “They limit the ability of app developers to inform iPad or iPhone users of alternative cheaper subscriptions, available elsewhere.
“In fact, to avoid paying the 30% commission, some music streaming providers decided to stop offering paid subscriptions in their apps. This is what Spotify decided to do in 2016. Since then, customers can download Spotify app in the Apple App Store, but they cannot purchase any subscription for Spotify premium services.”
Horacio Gutierrez, Spotify’s head of global affairs and chief legal officer, said: “Ensuring the iOS platform operates fairly is an urgent task with far-reaching implications.
“The European commission’s statement of objections is a critical step toward holding Apple accountable for its anti-competitive behaviour, ensuring meaningful choice for all consumers and a level playing field for app developers.”
A spokesperson for Apple said: “Spotify has become the largest music subscription service in the world, and we’re proud for the role we played in that.
“Spotify does not pay Apple any commission on over 99% of their subscribers, and only pays a 15% commission on those remaining subscribers that they acquired through the App Store.
“At the core of this case is Spotify’s demand they should be able to advertise alternative deals on their iOS app, a practice that no store in the world allows. Once again, they want all the benefits of the App Store but don’t think they should have to pay anything for that. The commission’s argument on Spotify’s behalf is the opposite of fair competition.”
Vestager’s announcement is the first formal step into Apple’s suspected violation of EU law which will likely take many years to find its way through the court system in Luxembourg.
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