The European Commission has accused Apple of abusing its dominant position in the market for distributing music streaming apps and as a result raising prices for consumers. The EU regulator found the company was harming competition by requiring music apps to use the Apple in-app payment system and not disclose alternative subscription channels to iOS customers. If the charges are confirmed, Apple could face fines of up to 10 percent of its turnover in the market.
The Commission launched an investigation into Apple's App Store policies last June, following a complaint from Spotify. Spotify said the 30 percent commission charged by Apple for selling on its store and restrictions if it doesn't use the Apple payment service essentially means Apple is giving its own content services an unfair advantage over third-party sellers.
The Commission has now sent a statement of objections to Apple, and the company will have the opportunity to respond before the Commission decides whether to take any further action.
The Commission's preliminary view is that Apple's rules distort competition in the market for music streaming services by raising the costs for apps that compete with the company's own Apple Music. This in turn leads to higher prices for consumers for their music subscriptions on iOS devices. In addition, Apple becomes the intermediary for all in-app transactions and takes over the billing relationship, as well as related communications for competitors.
The Commission found two main problems with Apple's practices. The first is the mandatory in-app purchase system, for which Apple takes the 30 percent commission. The Commission's investigation showed that most streaming providers passed this fee on to end-users by raising prices.
The other problem is "anti-steering provisions" imposed by Apple. This limits the ability of app developers to inform users of alternative purchasing possibilities outside of apps, such as the streaming provider's own website. While Apple allows users to use music subscriptions purchased elsewhere, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper.
