Business News Digital Legal

EU officials could send Apple statement of objections based on Spotify complaint, as UK regulator launches investigation into tech giant’s App Store rules

By | Published on Friday 5 March 2021


The European Commission could set out a list of objections in relation to Apple’s allegedly anti-competitive conduct in the next few weeks, sources have told Reuters and Bloomberg. Meanwhile, the UK competition regulator yesterday announced it was now launching an investigation into the ins and outs of the tech giant’s App Store.

EC officials are investigating various competition law complaints against Apple, though the one that could result in a statement of objections being sent to the company’s bosses in the next month relates to Spotify’s grievances.

Spotify, of course, went public with its long-running Apple beef in 2019, launching a website and filing a formal complaint with the European Commission, both of which argued that its rival exploits its market dominance to force unfair rules on app makers.

There were various specific moans in that complaint, but the big one related to the so called Apple Tax, ie the 15-30% Spotify is forced to pay to Apple if it sells subscriptions via its iOS app.

Given Spotify already hands over 70% of its income to the music industry, it is forced to pass any transaction fees onto the subscriber, which would mean – within the iOS ecosystem – Spotify would look more expensive than Apple Music.

The other option is to just not allow free users to upgrade to premium via the Spotify app. But more Apple rules stop Spotify from telling those free users where else online they can buy a premium package, making it harder to upsell freemium to premium.

Most of Spotify’s gripes are shared by ‘Fortnite’ maker Epic Games, of course, which has gone even more public with its Apple beef. Though it’s Spotify’s complaint that could result in specific demands being imminently made by the EC.

Citing various sources, Reuters reports: “The European Commission could send the statement of objections setting out suspected violations of the bloc’s antitrust rules to Apple before the summer … [an] EU ‘charge sheet’ usually indicates whether a fine is merited and what companies have to do to halt anti-competitive practices”.

In addition to the EU’s investigations, the UK’s Competition And Markets Authority yesterday confirmed it was launching “an investigation into Apple following complaints that its terms and conditions for app developers are unfair and anti-competitive”.

The regulator added: “[This] investigation will consider whether Apple has a dominant position in connection with the distribution of apps on Apple devices in the UK – and, if so, whether Apple imposes unfair or anti-competitive terms on developers using the App Store, ultimately resulting in users having less choice or paying higher prices for apps and add-ons”.

Commenting on the Apple investigation, CMA boss Andrea Coscelli said: “Millions of us use apps every day to check the weather, play a game or order a takeaway. So, complaints that Apple is using its market position to set terms which are unfair or may restrict competition and choice – potentially causing customers to lose out when buying and using apps – warrant careful scrutiny”.

“Our ongoing examination into digital markets has already uncovered some worrying trends”, he went on. “We know that businesses, as well as consumers, may suffer real harm if anti-competitive practices by big tech go unchecked. That’s why we’re pressing on with setting up the new Digital Markets Unit and launching new investigations wherever we have grounds to do so”.