William Malcolm

EU Charges Apple With Antitrust Breach

The European Commission (EC) today accused the American technology company Apple of violating antitrust laws. She sent the company a list of objections and requested to explain how he applies the rules in his online App Store. The Commission suspects that Apple is abusing its dominant position in the music streaming market by imposing restrictive regulations on developers.

The American company, which Brussels has punished in the past with heavy fines for other practices, is defending the collection of fees from competitors.

If Apple cannot refute the allegations, it faces a fine of up to ten percent of its annual worldwide sales. Last year, the company’s financial records show that Apple had sales of over $ 274 billion, so the maximum fine could reach about $ 27 billion (CZK 577 billion).

The smartphone maker iPhone got into a fight with the commission after a complaint from the Swedish streaming service provider Spotify. He pointed out two years ago that Apple unfairly restricted companies competing for its own Apple Music streaming service on iPhones.
In its objections to the US company, the commission now states that these are restrictive rules that Apple applies in the App Store, which forces developers to implement their payment system for services provided. Apple charges other companies a 30 percent fee, while its streaming service does not pay it. Competing providers also do not have the opportunity to inform customers that additional options are for purchasing services than through the Apple application.

“By setting strict rules on the App Store that disadvantage competing music streaming services, Apple deprives users of cheaper streaming options, thereby harming the competitive environment,” said Margrethe Vestager, EC’s vice president of competition.

According to her, the problem is not the fee itself, but competitors cannot send clients an e-mail directing them to their sites, where they would not have to pay the price.

“So this is where a possible 30 percent price difference arises for Apple Music and others,” Vestager said. According to her, not only Spotify, which complained but also other companies have a problem.

The American company responded to the commission’s preliminary conclusions by stating that Brussels itself is restricting the competitive environment by protecting Spotify. “They want all the benefits of the App Store, but they don’t think they should pay for it. The commission’s argument in favor of Spotify is the opposite of fair competition,” Apple said.

Apple is not in dispute with the European Commission for the first time. For example, in 2016, the commission ordered him to pay 13 billion euros in taxes. The dispute over the competition violation began last year when the commission launched an investigation into two other suspicions concerning the App Store and Apple Pay.

The European Commission is the EU’s executive body and has extensive powers. Among other things, it fulfills the role of an antitrust authority.