EU Charges Apple with Breach of Competition Law

ROSTOV-ON-DON / RUSSIA - March 28 2020: Apple Music logo on the smartphone screen, with airpods
EU says Apple stifled competition with restrictive policies.

EU antitrust legislators charged Apple with illegally preventing competition on the music streaming market with restrictive App Store policies. This is one of the largest competition cases against Apple and could see the company hit with massive fines. 

 

Apple rejected the claims through a spokesperson, saying that the charges were the “opposite of competition.” The charges come after EU regulators launched an investigation after complaints from streaming service Spotify. 

 

EU Competition Commissioner Margrethe Vestager released a statement saying, “Our primary conclusion: Apple is in breach of EU competition law.” The European Commission is the executive arm of the EU. The Commission said Apple’s rules force rival developers to provide commissions of up to 30% on in-app purchases. The rules also prevent app owners telling users about cheaper payment methods. 

 

Vestager said Apple was increasing costs for consumers and limiting consumer choice. 

 

“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,” the commissioner’s statement said.

“This is done by charging high commission fees on each transaction in the App Store for rivals and by forbidding them from informing their customers of alternative subscription options.”

 

This case marks the first EU antitrust campaign against Apple. It comes after the EU launched an investigation in June. The investigation found App Store commission fees were passed on to customers. The probe came after a complaint from Spotify. The streaming service, a direct competitor of Apple Music, complained two years ago about the App Store rules. 

 

The European Commission says Apple has a chance to respond to the allegations and present a counter-case before the final ruling is delivered. The company faces potentially damaging fines of up to 10% of global turnover. 

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