Brussels – The EU Commission has accused Apple of unfair competition due to the terms of its use of the App Store for music providers. The authority was of the view that the US group had “abused its dominant position in the distribution of music streaming applications through the App Store”. Apple has denied the allegations and sharply criticized Swedish music provider Spotify in Brussels.
“App stores play an important role in today’s digital economy,” said Margaret Vestager, competition commissioner. Apple is the “gatekeeper” of stores for iPhones and iPods, but at the same time competing with other music providers for its music streaming service. These can be harmful in Apple’s App Store. This is because the US Group demands “high commission fees on all transactions” and forbids competitors from “informing customers about alternative subscription options”.
The commission launched a lawsuit against Apple in June last year following complaints from Spotify and other providers. Brussels has now sent Apple a statement of objections to which the company could comment. The Commission ressed that this did not prejudge the final outcome of the investigation.
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If the Authority’s allegations are finally confirmed, Apple will face a fine. In principle, this can include up to ten percent of annual sales. Apple only allows downloading apps and games on mobile devices from its own app store. He suggests his own Apple Pay system as a payment method and collects fees of up to 30 percent of the app provider’s revenue.
The music streaming case is one of several cases that the commission launched an investigation into last year against Apple. Others are concerned about Apple Pay, the Apple payment system, and sales of e-audio books.
Spotify filed a complaint against Apple in 2019
In 2019, Spotify filed a lawsuit against Apple in Brussels. The company says the U.S. giant is twisting competition in favor of its own Apple Music offering with restrictions on the app store. In addition, the company loses control of other customer providers.
Spotify praised Brussels’ move, saying, “This is a crucial step in Apple’s anti – competitive nature. The goal should be to give users real choices and ensure reasonable competition conditions for app developers.
“Spotify has become the largest music subscription service in the world and we are proud of our role in that,” Apple said. The Swedish company does not pay any commission to Apple for “over 99%” subscribers. Of the rest, the company received only 15 percent through the Apple Store.
Apple pays 13 billion euros in taxes
At the heart of the case, the US company said, was the need for Swedes to advertise alternative offers on their app for Apple devices. This is a training that “no app store in the world allows”. The company wants “all the benefits of the App Store” from Apple, but is of the opinion that “there is no need to pay for it”. The Commission’s allegations are therefore “the opposite of fair competition”.
Years ago, Apple was targeting the European Union for tax issues. In 2016, the commission ordered the company to pay 13 billion euros in taxes in Ireland. The European Court of Justice overturned the decision, but the European Commission appealed.
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