The European Commission formally initiated an antitrust lawsuit against Apple
The European Commission (EC) previously had four public antitrust investigations against Apple, including three public investigations on the Apple App Store, which began with the allegations made by Spotify in 2019. After two years, the preliminary conclusion of the European Commission showed that Apple violated the EU competition law.
Margrethe Vestager, Executive Vice President of Digitalization and Fair Competition of the European Commission, said on her Twitter account that the European Commission has issued a statement to Apple accusing it of using its market monopoly to compete in the music streaming market.
Preliminary investigation conclusions show that the European Commission is targeting Apple’s own in-app purchase system. Almost all music streaming services must charge users a 30% commission on products purchased through Apple’s system, which has led to an increase in the price of in-app music subscriptions. The European Commission is also concerned that Apple is imposing restrictions on app developers, using mobile app store specifications to prevent developers from telling users about other subscription channels. At the same time, the European Commission has also become interested in the game policy on the App Store.
If Apple is ultimately convicted of violating EU regulations, it will face a fine of 10% of its annual income. Apple’s global revenue in 2020 is 274.515 billion U.S. dollars, which means that the fine may be as high as 27.45 billion U.S. dollars. At the same time, Apple is likely to be forced to change its business model.
Apple issued a statement to The Verge, responding to the findings of the European Commission, “Spotify has become the largest music subscription service in the world, and we’re proud for the role we played in that. Spotify does not pay Apple any commission on over 99% of their subscribers, and only pays a 15% commission on those remaining subscribers that they acquired through the App Store. At the core of this case is Spotify’s demand they should be able to advertise alternative deals on their iOS app, a practice that no store in the world allows. Once again, they want all the benefits of the App Store but don’t think they should have to pay anything for that. The Commission’s argument on Spotify’s behalf is the opposite of fair competition.”
In addition to Spotify, Netflix and Rakuten have also filed related complaints. As for Epic Games, the antitrust is even bigger. As the opposition to the App Store has become stronger and stronger, in the past year, Apple seems to have relaxed some policies, such as any developer with an annual income of less than $1 million, Apple has reduced its App Store commission to 15%.