EU to accuse Apple of distorting competition in music streaming

The EU is set to bring antitrust charges against Apple for the first time, putting more pressure on the iPhone maker to change the way it runs its App Store.

According to several people familiar with the matter, the EU will follow up on a complaint filed two years ago by music streaming site Spotify, which said Apple was taking a 30% cut in its subscription fees for presenting it in the App Store and refusing it. it has the right to tell its users that other means of upgrading are available.

Spotify also complained that Apple Music, the Cupertino company’s own music service, was able to cut it down on the price because it didn’t have to pay the same 30% fee.

Most recently, Epic Games, the creator of Fortnite, saw its hugely popular game deleted from the Apple App Store after it started directing gamers to its own payment system. Epic has also filed a competition complaint against Apple in the EU.

Antitrust challenges around the world threaten one of Apple’s fastest growing and most profitable lines of business. Its suite of digital services – which includes music and video, cloud storage, games, and a growing range of other add-ons – is now Apple’s second-largest revenue stream after iPhone, with a figure of business of $ 15.8 billion in three months. December.

The latest charges are the culmination of a series of EU antitrust investigations into its business practices, launched after Spotify’s complaint.

They also come as global regulators increasingly surround the company. Earlier Thursday, the UK’s Competition and Markets Authority announced an antitrust investigation to determine whether the company was abusing its dominant position on the App Store by imposing unfair terms on developers.

“Complaints that Apple is using its market position to set terms that are unfair or may restrict competition and choice – which could cost customers a loss when buying and using apps – justify careful consideration, ”said Andrea Coscelli, CEO of CMA.

Apple has argued that its system ensures the security and privacy of its customers, while still allowing independent developers access to the same set of tools as large companies such as Spotify and Epic.

But critics say he enforces the rules unevenly and imposes too high a commission for his stewardship on every iPhone owner.

Under Apple’s current rules, apps that deliver paid digital content to the App Store must use the company’s integrated payment system and cannot advertise lower prices if customers sign up outside of the App Store. Apple market.

App developers must share 30% of the monthly subscription fee with Apple for all customers who sign up through the App Store. This commission drops to 15% after the first year, but can still prevent low-margin services such as music streaming from operating profitably.

As a result, some of Apple’s rivals have either disabled their option of paying through the app on the App Store or passed the additional costs on to their customers. Regulators believe Apple’s practices can hurt consumers by preventing them from accessing more choice and lower prices.

Apple has tried to avoid regulatory pressure and appease its developers by cutting some of its fees, announcing in November that it would cut its fees on in-app purchases for small developers by half.

People familiar with the matter have warned that it could still be months before formal charges are laid against Apple and the case could still be closed.

The European Commission declined to comment. Apple was not immediately available for comment. However, at the time of the Spotify complaint, Apple accused the music streaming app of wrapping “its financial motives in misleading rhetoric“.

Additional reporting by Tim Bradshaw in London

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