According to the European Commission, Apple is guilty of abuse of power with the App Store. The iPhone maker competes with its own Apple Music with music services such as Spotify, but at the same time it charges a high commission to those competitors to be in the App Store.
That is the provisional conclusion of European Commissioner Margrethe Vestager (Competition) after a one-year investigation. “Consumers are getting the short straw,” says Vestager of Apple’s way of handling payments in the App Store.
According to the Commission, “Apple is abusing its dominant position as a distributor of music apps.” Apple determines which apps are allowed in the App Store. “The Commission objects to the mandatory use of Apple’s own in-app purchasing mechanism imposed on music streaming app developers to distribute their apps through Apple’s App Store.”
Abuse of power as a gatekeeper
“Our preliminary finding is that with the App Store Apple is a gatekeeper for users of iPhones and iPads,” said European Commissioner Vestager. “With Apple Music, Apple also competes with music streaming providers. By imposing strict rules on the App Store that are detrimental to competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition.”
“This is done by charging high commission fees for every transaction in the App Store to rivals and by prohibiting them from informing their customers about alternative subscription options,” Vestager concludes.
Any measures will follow later
With the preliminary finding that Apple is abusing its power, the Commission will investigate the situation further. The parties involved are given the opportunity to inspect the research and to respond to the findings.
Only then will the Commission come up with any steps. Apple could be fined or forced to allow apps like Spotify to point to their own subscription page. In previous abuse of power cases against, for example, Google, the Commission imposed billions of fines . Usually the main conclusion at the end of such an investigation holds. In this case, Apple would be in violation of Article 102 of the EU Treaty.