Europe Blames Apple Of Deforming Contest In Music Streaming Market

Description of Europe Blames Apple Of Deforming Contest In Music Streaming Market

This investigation follows a complaint filed by Spotify in 2019, which accused Apple of using its position as guardian of the App Store to stifle competition in music streaming.
The European Commission said on Friday it would sue Apple after an investigation found the company "abused its dominant position in the music streaming market" to stifle competition.
Following a complaint filed by Spotify in 2019, the European Commission launched an investigation to determine whether Apple's rules for developers who distribute apps through the App Store violate EU competition rules.
The survey specifically examined the mandatory use of Apple's own in-app (in-app) purchasing system, which charges app developers a 30% commission on all in-app purchases, as well as policies app Store that prohibit developers from telling consumers other ways to purchase content outside of apps, which may be cheaper.
The conclusions of the preliminary investigation
The Commission says it preliminary considers that Apple violated the competition rules by using its position as guardian of the App Store to "distort competition in the market for music streaming services by increasing costs competing music streaming application developers ”.
In particular, the Commission opposed the system of in-app purchases that Apple imposes on application developers and expressed concern that the restrictions imposed by Apple on application developers prevent them from "informing iPhone and iPad users of other cheaper purchasing possibilities”.
While the antitrust complaint focuses on streaming music, it could have broader implications for in-app purchases and the pass-through from Apple to consumers. “Our preliminary conclusion is that Apple is a gatekeeper to iPhone and iPad users through the App Store. With Apple Music, Apple also competes with music streaming providers,” said executive vice president Margrethe Vestager, in charge of competition.
“By setting tough rules on the App Store that put competing music streaming services at a disadvantage, Apple is depriving users of cheaper choices and skewing the competition. This is done by charging high commissions on every transaction in the App Store for rivals, and forbidding them to inform their customers of alternative subscription options. "
A communication followed by the reactions of Spotify and Apple
The EC noted, however, that its preliminary findings “do not prejudge the outcome of an investigation”.
Following the decision by the European Commission, Spotify CEO Daniel Elk expressed his satisfaction on Twitter.
”Today is a big day. Fairness is the key to competition. With the Statement of Objections from the European Commission, we are getting one step closer to creating a level playing field, which is so important for the entire European developer ecosystem. "
Apple did not fail to react either. “Spotify has grown into the world's largest music subscription service, and we're proud of the role we've played in that regard. Spotify does not pay any commission to Apple on more than 99% of its subscribers, and only pays a commission of 15% on the remaining subscribers acquired by the App Store, ”said the Cupertino company in a statement.
“At the heart of this matter is Spotify's demand to be able to advertise alternative offers on its iOS app, a practice that no store in the world allows. Once again, they want all the benefits of the App Store but don't think they should have to pay anything for it. The commission's argument in favor of Spotify is the opposite of fair competition,”continues Apple.