EU accused Apple of breaching competition rules due to Spotify's complaint
The European Commission issued a preliminary statement that Apple holds an unfair advantage in the music streaming space over competitors like Spotify.
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| Logo of Apple App Store and Spotify |
EU claims that Apple has a monopoly in the distribution of apps
After Spotify complained in 2019 about Apple’s license agreements, the European Commission formed an antitrust investigation into the App Store last year. Other big companies like Netflix and Epic Games have also publicly opposed the Apple tax's policy, alongside many other developers.
These agreements require app developers to pay 30 percent on all subscription fees that come through the App Store. EU recently said the issue roots from "mandatory use of Apple’s own in-app purchase mechanism imposed on music streaming app developers to distribute their apps via Apple’s App Store.
Aside from that, app developers cannot inform users of alternative ways to purchase the same apps elsewhere. Due to these two reasons, the European Commission has come up with a statement that the Cupertino giant is abusing its dominant position for the distribution of music streaming apps through the App Store. During a press conference, EU's head of competition policy Margrethe Vestager further explained,
Our preliminary finding is that Apple exercises considerable market power in the distribution of music streaming apps to owners of Apple devices. On that market, Apple has a monopoly.
As a response, Apple argued that the EU's accusation is the "opposite of fair competition". The company is insisting that they are using the money generated from the tax to maintain the App Store and its content privacy and security. Apple explained that Spotify wants all the benefits of the App Store but doesn’t think they should have to pay anything for that.
Apple's objections to the accusations are not still enough because they have to reply to the European Commission either through writing or an oral hearing. In addition to this, the commission is also looking at Apple Pay, but Vestager did not disclose when the case will be over.
If Apple is proven to be guilty of abusing its advantage in this issue, it will receive a penalty of 10 percent of its annual revenue which could be around USD 27 billion.
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