Apple has been found to be in breach of EU competition law with Apple Music, according to the preliminary findings of the European Commission. The charges relate to a two-year-old antitrust dispute initiated by Spotify.
The European Commission was expected to bring charges against Apple over concerns that its App Store rules break EU competition law this week, and ahead of a formal verdict, Margrethe Vestager, the EU's digital competition chief tweeted the preliminary findings of the commission:
Our preliminary conclusion: @Apple is in breach of EU competition law. @AppleMusic compete with other music streaming services. But @Apple charges high commission fees on rivals in the App store & forbids them to inform of alternative subscription options. Consumers losing out. — Margrethe Vestager (@vestager) April 30, 2021
Apple has been formally told of the conclusion, according to an EU Commission press release.
In 2019, Spotify filed a complaint with the European Commission, alleging that Apple enforces App Store rules that "purposely limit choice and stifle innovation at the expense of the user experience," accusing the company of "acting as both a player and referee to deliberately disadvantage other app developers."
Spotify highlighted that Apple's 30 percent commission on App Store purchases, including in-app subscriptions, forces the music streaming service to charge existing subscribers $12.99 per month for its Premium plan on the App Store, just to collect the $9.99 per month it usually charges.
Spotify argues this gives Apple an unfair advantage because it's unable to compete with Apple Music's standard $9.99 per month price within the App Store.
If Spotify chooses not to collect payments via the App Store, Apple purportedly "applies a series of technical and experience-limiting restrictions" on the company. It was also said that Apple was "locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch," thereby making Apple Music a more attractive option for subscribers.
The EU is expected to issue Apple with a charge sheet before the summer. It is not yet known what exactly the EU's sanctions could involve, but it has been suggested that Apple could be forced to pay a fine or make changes to its App Store business model in Europe to foster greater competition.
The Spotify antitrust case is one of several opened by the European Commission into Apple's business practices in June last year. Apple has denied allegations of anti-competitive behavior, and said at the time of Spotify's complaint that its rival was using "its financial motivations in misleading rhetoric."
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