EU charges Apple with antitrust violations stemming from Spotify case
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The European Union on Friday charged Apple with antitrust violations, alleging the U.S. company abuses its dominant position in the marketplace, the Wall Street Journal reports.
Why it matters: The European Commission said Apple violated antitrust laws by requiring music-streaming apps to use its in-app payments system to sell digital content, and by charging high commission fees on apps that compete with its music-streaming app, Apple Music.
- The Commission alleges that Apple also abused its power by limiting how app developers can inform users about cheaper subscription services.
Context: The EU's investigation into Apple stems from a complaint against Apple's commission fees from Spotify, a music streaming app in direct competition with Apple Music.
- Apple will have a chance to argue against the antitrust charge. If found guilty, the company could face a fine of up to 10% of its annual revenue and will be required to change its business practices.
What they're saying: "Our preliminary conclusion: Apple is in breach of EU competition law. Apple Music compete[s] 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," EU antitrust chief Margrethe Vestager tweeted Friday.
- “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 anticompetitive behavior, ensuring meaningful choice for all consumers and a level playing field for app developers," Spotify said in a statement Friday.
The other side: "Spotify has become the largest music subscription service in the world, and we’re proud for the role we played in that," Apple said in a statement Friday.
- "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."
Thought bubble, via Axios' Ashely Gold: The EU decision comes as Apple comes under increasing scrutiny for its App Store practices in the U.S. Expect Apple to fight hard on both fronts.
The big picture: Epic Games, the developer of the video game Fortnite, filed a similar antitrust complaint against Apple's in-app payment system in February.
