Apple accused of breaking EU competition rules over App Store payments for music streaming
Tech giant Apple has been charged with breaking EU competition rules over its App Store rules on in-app payments in the music streaming market.
In a statement of objections sent to the company, the European Commission took issue with Apple forcing other music streamers using the App Store to process in-app payments through Apple’s own system, from which the firm takes a commission.
The EU said these rules "distorted competition" because other apps were trying to compete with the Apple Music streaming platform.
European Commission executive vice-president Margrethe Vestager tweeted: "Our preliminary conclusion: Apple is in breach of EU competition law.
"Apple Music compete with other music streaming services. But Apple charges high commission fees on rivals in the App store and forbids them to inform of alternative subscription options. Consumers losing out."
The case comes after fellow music streaming giant Spotify lodged a complaint, which led to the commission opening an investigation last year.
Apple has the chance to reply to the EU’s objections in writing and to request an oral hearing to present its case.
The company could face a large fine and be forced to change its policies if it fails to convince regulators.
The commission said it was concerned that Apple applied restrictions on app developers which prevented them from informing iPhone and iPad users of alternative and potentially cheaper choices.
Spotify’s head of global affairs and chief legal officer Horacio Gutierrez said: “Ensuring the iOS platform operates fairly is an urgent task with far-reaching implications.
“The European Commission’s statement of objections is a critical step toward holding Apple accountable for its anti-competitive behaviour, ensuring meaningful choice for all consumers and a level playing field for app developers."
In response to the European Commission, Apple said: "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."
It is not the first investigation that the Commission has brought against Apple
In September, it took Apple and the Irish government to the highest court in the European Union for what Brussels deems unfair taxation practices.
The EU ruled in 2016 that Apple had to repay 13 billion euros (£11.3 billion) in unpaid taxes to the Irish government, after the latter granted "undue tax benefits".
Apple and the Irish government have appealed the decision and the case continues.
In 2017, an investigation by the BBC and The Guardian claimed that Apple moved funds to the Channel Islands after a crackdown on tax laws in Ireland.
Apple said at the time: "When Ireland changed its tax laws in 2015, we complied by changing the residency of our Irish subsidiaries and we informed Ireland, the European Commission and the United States.
"The changes we made did not reduce our tax payments in any country."
It added: "We understand that some would like to change the tax system so multinationals' taxes are spread differently across the countries where they operate, and we know that reasonable people can have different views about how this should work in the future.
"At Apple we follow the laws, and if the system changes, we will comply."