The European Commission is reportedly getting ready to fine Apple Inc. €500 million ($539 million) for allegedly violating EU law by restricting access to competitors to favor Apple Music on the iPhone.
Spotify's Antitrust Investigation
According to The Financial Times, relying on information from five individuals familiar with an antitrust investigation into Apple, the fine is anticipated to be announced early next month, marking the conclusion of a European Commission investigation into whether Apple favored its services using its platform.
The investigation dates back to 2019 when Spotify Technology SA filed an antitrust complaint, alleging that Apple was unfairly enforcing App Store policies, giving an advantage to its services over rivals.
Spotify argued that Apple showed bias against other music services by charging them a 30% fee on purchases in the app store, a requirement not applied to companies like Uber Technologies Inc. Additionally, Spotify claimed that developers who opted out of Apple's in-app payment system faced extra restrictions from Apple.
Apple Banning Developers Not Using its In-App Purchase System
Apple banned developers who do not use its in-app purchase system from advertising paid services like subscriptions within their apps. According to the policy, iOS apps could not show buttons or links that direct users to external product pages, even if those pages are only informational.
In 2022, it was reported that the European Commission stated that Apple's rule, which limits streaming apps to using only Apple's in-app purchase system for transactions, effectively led to higher prices.
The Financial Times report suggests that along with the fine, the commission will declare Apple's actions illegal and in violation of the bloc's competition enforcement rules. Apple will be accused of misusing its dominant position and enforcing anticompetitive practices against its competitors. The ruling will ban Apple from preventing users from switching to cheaper options outside of its App Store.
Apple's Questionable Business Practice
This is not the first time Apple has been investigated for potentially questionable business practices. In March 2021, U.K. started an investigation on similar grounds, suggesting that the U.S. Department of Justice was considering filing a wide-ranging antitrust lawsuit against Apple by the first half of 2023, reportedly related to the App Store as well.
The UK's Competition and Markets Authority announced that it has received complaints from developers regarding certain terms of service in the App Store. One aspect the authority plans to examine is Apple's demand that iOS apps be solely distributed through its marketplace. The investigation will also scrutinize a policy requiring developers to use Apple's payment system for in-app transactions, which incurs a commission of up to 30%.
Officials will investigate whether the conditions set by the iPhone maker for developers are unfair or anticompetitive, and whether these terms result in higher prices for apps and in-app purchases for U.K. consumers, exploring whether Apple's policies limit purchasing options.
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