EC Pressures Apple with Music Streaming Charge
The European Commission said that Apple broke local laws by distorting competition in the music streaming market and abusing its dominant position in the segment through its App Store. Explaining the outcome of a two-year investigation, started after a complaint from Spotify, the EC announced it had sent objections to Apple over its practices related to the distribution of music streaming apps.
The EC highlighted the mandatory use of Apple’s purchase mechanism in the App Store, noting it had concerns the US company placed certain restrictions on app developers which prevented them from informing iPhone and iPad users of alternative, cheaper purchasing possibilities. European Commission cited Apple’s 30 percent commission rate and requirements for developers to adhere to strict rules to access the App Store, factors the company argues are designed to ensure quality.
EC executive vice president Margrethe Vestager said there were clear signs Apple's App Store rules were affecting music streaming rivals' business development and affecting app developers more widely. “With Apple Music, Apple also competes with music streaming providers. By setting strict rules on the app store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition,” Vestager said.
With the EC formally charging Apple, the case could now go to court, although an appeal by the company is likely and is expected to hold up formal proceedings. Financial Times wrote that this is the first time EU regulators have formally charged Apple.