US tech giant Apple is violating the EU’s competition laws by imposing undue restrictions on music services present in its app store, a preliminary conclusion by a European Commission investigation said.
The EU launched an antitrust investigation into the Apple Store in June 2020, after complaints from Swedish-based music service Spotify and an unnamed e-book and audiobook distributor. They said the app store, which is mandatory to use for Apple devices, has discriminatory rules for competitors.
These include a 30% commission on all payments made through the US company’s in-app purchase system, and a ban on informing users of alternative payment methods. Apple denied engaging in anti-competitive behavior.
The commission said on Friday that it informed Apple about its preliminary view on the business dispute, which backed the complaints’ assertion that the US company was abusing its dominant market position.
“Our preliminary finding is that Apple is a gatekeeper to users of iPhones and iPads via the App Store,” the commission’s executive vice president, Margrethe Vestager, said. By enforcing its fees and gag rules on rival apps, “Apple deprives users of cheaper music streaming choices and distorts competition.”
The formal step is part of a legal process aimed at resolving the dispute. It “does not prejudge the outcome of the investigations,” the commission said. Apple responded to the news by again denying the antitrust allegations against it. The EU’s case is “the opposite of fair competition,” an Apple spokesperson said, as cited by the media.
The charge against Apple may result in heavy fines of as much as 10% of its global turnover under EU law. In-app payment commissions are at the core of a dispute Apple has with Epic Games, the developer of popular free-to-play online game ‘Fortnite’. An antitrust trial between the two companies is set to start in the US next week.
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