EC investigates Apple App Store rules for music streaming providers
The preliminary view is that it abused its dominant position in this specific marketEuropost , Brussels
The Commission has informed Apple of its preliminary view that it distorted competition in the music streaming market as it abused its dominant position for the distribution of music streaming apps through its App Store.
The EU executive takes issue with the mandatory use of Apple's own in-app purchase mechanism imposed on music streaming app developers to distribute their apps via Apple's App Store. The Commission is also concerned that Apple applies certain restrictions on app developers preventing them from informing iPhone and iPad users of alternative, cheaper purchasing possibilities.
The Statement of Objections that the Commission sent on Friday concerns the application of these rules to all music streaming apps, which compete with Apple's music streaming app “Apple Music” in the European Economic Area (EEA). It follows-up on a complaint by Spotify.
EC Executive Vice-President Margrethe Vestager, in charge of competition policy, commented that 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, she said noting that the preliminary finding of the Commission 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,” EVP Vestager explained.
Apple's App Store is part of this ecosystem and the only app store that iPhone and iPad users can use to download apps for their mobile devices. The Commission found that users of Apple's devices are very loyal to the brand and they do not switch easily. As a consequence, in order to serve iOS users, app developers have to distribute their apps via the App Store, subject to Apple's mandatory and non-negotiable rules.
A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The addressees can examine the documents in the Commission's investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. Sending a Statement of Objections and opening of a formal antitrust investigation does not prejudge the outcome of the investigations.