Apple’s App Store breaks competition rules, EU Commission says

Apple’s App Store restrictions, and its 30pc commission, are distorting the European music market says Competition commissioner Margrethe Vestager.

Apple’s App Store rules distort competition, according to the EU Commission

Adrian Weckler Twitter Email

April 30 2021 11:45 AM

Apple’s App Store will be investigated by the European Commission for anti-competitive behaviour and distorting the music market.

The announcement, on foot of a complaint from Spotify, was made today by the EU’s Competition Commissioner, Margrethe Vestager. It takes aim at Apple’s “gateway” for music apps, as well as its 30pc commission fee.

“The Commission's preliminary view is that Apple's rules distort competition in the market for music streaming services by raising the costs of competing music streaming app developers,” said the Commission in a statement today.

“This in turn leads to higher prices for consumers for their in-app music subscriptions on iOS devices. In addition, Apple becomes the intermediary for all IAP transactions and takes over the billing relationship, as well as related communications for competitors. While Apple allows users to use music subscriptions purchased elsewhere, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper. The Commission is concerned that users of Apple devices pay significantly higher prices for their music subscription services or they are prevented from buying certain subscriptions directly in their apps.

The move comes amid an appeal by the Commission to a European Court’s ruling that its €13bn tax finding was wrong.

“Our preliminary finding is that Apple is a gatekeeper to users of iPhones and iPads via the App Store,” said Ms Vestager. “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. 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.”

The Commission says that Apple has a “dominant” position in the market for the distribution of music streaming apps through its App Store.

“For app developers, the App Store is the sole gateway to consumers using Apple's smart mobile devices running on Apple's smart mobile operating system iOS,” it adds. “Apple's devices and software form a closed ecosystem in which Apple controls every aspect of the user experience for iPhones and iPads.”