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Apple is facing mounting pressure to change the way in which it treats rival music streaming services through the App Store in the European Union.
The European Commission (EC) has today accused Apple of abusing its “dominant position for the distribution of music streaming apps through its App Store.” In particular, the EC points to Apple requiring the use of its in-app purchase mechanism by music streaming services, of which Apple takes a cut. At the same time, those rival services are prevented “from informing iPhone and iPad users of alternative, cheaper purchasing possibilities.”
Margrethe Vestager, Executive Vice-President of the European Commission for a Europe fit for the Digital Age (Competition), tweeted news of the decision, as well as releasing the following statement:
“App stores play a central role in today’s digital economy. We can now do our shopping, access news, music or movies via apps instead of visiting websites. Our preliminary finding is that Apple is a gatekeeper to users of iPhones and iPads via the App Store. 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 EC believes “Apple’s rules distort competition in the market for music streaming services” and this leads to higher prices for consumers. It’s seen as infringing Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant market position, and if “confirmed,” Apple could face both a hefty fine and a demand to cease the abusive conduct.
For now, the EC has issued a Statement of Objections, which informs Apple in writing of the objections being made regarding its behavior along with any relevant documents. In turn, Apple can reply in writing and request an oral hearing to present its comments on the case before the Commission. As there are no legal deadlines attached to an antitrust investigation, this case could continue for quite some time.
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