The European Commission has announced that it has formally issued contradictory allegations against Apple, stating today that its initial view is for music streaming services by raising the cost of music streaming app developers competing Apple’s App Store rules. There is competition in the market.
The commission started investigating competition concerns related to the iOS App Store (and Apple Pay) last summer.
“The commission has taken issue with Apple’s mandatory use of its own in-app purchase mechanism imposed on music streaming app developers to distribute their apps through Apple’s App Store,” it wrote today. “The Commission is also concerned that Apple imposes certain restrictions on developers, preventing them from notifying iPhone and iPad users of alternative, cheaper purchase possibilities.”
The description of the objections focuses on two rules Apple imposed in its agreements with music streaming app developers: essentially using its proprietary-in-app purchase system (IAP) to deliver paid digital content Mandatory requirement of (30% commission fee on all such subscriptions purchased through the IAP) (noticeable by the commission that it charges); And ‘anti-steering provisions’ that limit the ability of developers to notify users of alternative purchase options.
“The commission’s investigation has revealed that most streaming providers have passed this fee. [Apple’s 30% cut] To end users by increasing the value, “it reads:”Although Apple allows users to use music subscriptions purchased elsewhere, its rules prohibit developers from informing users about purchasing possibilities, which are usually cheap. The Commission is concerned that users of Apple devices have to pay significantly higher prices for their music subscription services or are prevented from purchasing certain subscriptions in their apps. “
In a statement, EVP and head of competition Margaretha Westeger said: “App stores play a central role in today’s digital economy. Now we can do it through apps instead of going to our shopping, access news, music or movies websites. Our initial search is a gatekeeper for users of iPhones and iPads through the Apple Store. Apple Music also competes with streaming providers with Apple Music. By establishing strict rules on the App Store that hurt music streaming services, Apple deprives users of the competition for inexpensive music streaming options and distractions. This is done by charging high commission fees for each transaction in the App Store for competitors and refusing them to inform their customers of alternative subscription options. “
Apple sent us this statement in response:
“Spotify has become the largest music subscription service in the world, and we take pride in the role we played. Spotify Apple does not pay any commission on more than 99% of its customers, and only pays 15% commission on the remaining customers that they acquired through the App Store. At the core of the matter is Spotify’s demand that they should be able to advertise alternative deals on their iOS app, a practice that no store in the world allows. Once again, they want all the benefits of the App Store, but don’t think they have to pay anything for it. The Commission’s argument on behalf of Spotify is contrary to fair competition. “
Spotify’s founder, Daniel Eck, has also reacted to the news of the commission’s allegations against Apple with Jubilant’s tweet – writing: “Today is a big day.” Fairness is the key to competition … We are close to creating a level playing field, which is very important for the entire ecosystem of European developers. “
Westegar is soon to hold a press conference – so stay tuned for updates.
This story is developing …
Several complaints against Apple’s practices have been lodged in recent years with the EU’s competition division – including the music streaming service Spotify; Video game maker Epic Games; And the messaging platform Telegram, to name the names of some complainants who have gone public (and are the most outspoken).
The main objection (up to 30%) is cut, with Apple taking over sales through a third-party app – which critics term as an ‘Apple tax’ – as well as how it mandates developers Not informing users how to circumvent its in-app payment infrastructure by signing up for a subscription through the App Store via its own website. Other complaints include that Apple does not allow third-party App Stores on iOS.
Meanwhile, Apple has argued that its App Store does not have a monopoly. Mobile devices ‘iOS’ global market share is slightly over 10% from Google’s rival Android OS – running on the lion’s share of the world’s mobile hardware. But the state of monopoly depends on how a market is defined by regulators (and Apple has no competitor if you’re looking at the market for iOS apps).
IPhone manufacturers also like to point out that the vast majority of third-party apps pay no commission to it (as they do not earn through in-app-apps). However it argues that a ban on native apps is necessary to protect iOS users from threats to their security and privacy.
Last summer, the European Commission said its App Store investigation focused on Apple’s mandatory requirement that app developers use their own proprietary-in-app purchase system, as well as restrictions on the ability of developers to provide alternative affordable purchase possibilities. iPhone and iPad notify users. Of apps.
It also stated that it was investigating Apple Pay: Apple is imposing its payment solution on iPhones and iPads to integrate into the apps and websites of others, given the T & Cs and other terms, and that of the NFC Functionality on iPhones for payment in stores (contactless payment), even with limited access to others in contact.
The EU’s rebel regulator then also said it was investigating allegations of “refinancing access” for Apple Pay.
In March this year the UK also joined an Apple App Store antitrust investigation investigation – announcing a formal inquiry into whether it had a dominant position and if it imposed unfair or anti-hostile conditions on developers using its App Store .
Meanwhile, US lawmakers have also paid more attention to competition in the App Store, plural and digital markets, which in recent years have led both Apple and Google to question how they operate their respective mobile app marketplaces.
Last month, for example, representatives of two tech giants were pressed on whether their app stores share data with their product development teams – with lawmakers digging complaints against Apple, in particular that Cupertino copies others’ apps, ‘shirling’ by releasing its business. The native imitator (as the surname is given).
In July 2020, the House Antitrust Subcommittee took testimony from Apple CEO Tim Cook himself – and in a fat report on competition in digital markets, accusing Apple of leveraging its control of iOS and the App Store and enforcing barriers . To compete and discriminate against and exclude rivals, prioritizing their own offerings.
“Apple also uses its app to exploit app developers through misuse of competitive information and to charge competitive prices from Apple customers in the App Store,” the report said. “Apple continues to dominate the market due to the presence of network effects, high barriers to entry and high switching costs in the mobile operating system market.”
The report did not exclude Apple – the Google-owning alphabet, Amazon and Facebook were also destroyed for misusing their market power. And the Justice Department filed a lawsuit against Google later that same month. Therefore, in the US, the stage is being set for further action against big technology. However what, if any, federal charges may be faced.
At the same time, state-level technical regulation efforts, including a push in Arizona to relieve developers from Apple and Google’s App Store profits cuts, are running around big technology and antitrust.
While a no-confidence bill introduced by Republican Josh Hawley earlier this month, the takeover aims, which propose a precise block on the ability of big technology to carry out mergers and acquisitions. Although this bill does not appear likely to succeed, anti-reform bills are still in the air, as US lawmakers are introduced on both sides of the aisle as to how big technology is shaped to compete. Be cut into.
Lawmakers in Europe are already laying down draft laws with the same goal.
In the European Union, the Commission recently proposed a prior regime to prevent big technology from abusing its market power. The Digital Market Act is set to impose conditions on intermediate platforms that are considered ‘gatekeepers’ for others’ market access.
In Britain, which now sits outside the block, the government is drafting new laws in response to the market strength of tech giants. It has stated that it intends to create a ‘pro-competition’ regime that would apply to platforms with so-called ‘strategic market conditions’ – but instead of a defined list of requirements it intends to target specific measures per platform.