The European Commission announced on Friday that Apple had "abused its dominant position” when it comes to the distribution of music streaming apps via its app store.
At a press conference, Head of competition policy Margrethe Vestager said, "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."
Spotify's complaint against Apple in 2019
On 11th March 2019, Spotify had filed a complaint against competitor Apple regarding two rules in Apple's license agreement with developers. The first rule is related to in-app purchases. According to the agreement, it is mandatory for developers to use Apple's proprietary in-app purchase system called IAP. Apple charges a 30% commission for any in-app purchases made from apps downloaded via the app store. The second rule is related to developers' ability to inform users about alternative purchasing possibilities outside of apps. Apple allows its device users to consume content like music, ebooks, etc that are purchased from other places like a developer's website. However, it restricts the ability of developers to inform users about these alternative purchasing options. Spotify objected to these rules saying they created unfair competition in the music streaming services market.
The European Commission's Findings
In response to Spotify's complaint, the European Commission opened an antitrust investigation into Apple last year. After a preliminary investigation, the commission has concerns about Apple's insistence that developers use their own in-app purchase system. The commission has summarized its concerns in a "statement of objections" that has been sent to Apple. The next step will be for Apple to respond to the statement in writing or via an oral hearing.
In a statement, Apple said, "Spotify has become the largest music subscription service in the world, and we’re proud of the role we played in that. Once again, they want all the benefits of the App Store but don’t think they should have to pay anything for that.” Apple has criticized the European Commission's case and called it the "opposite of fair competition."
Spotify meanwhile responded positively to the EU's findings. In a statement, Spotify's chief legal officer Horacio Gutierrez said, "“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.”
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