The European Commission has sent Apple an updated Statement of Objections regarding its practices for music streaming services, a market segment in which it has been accused of abuse of dominant position. Today’s communication does not constitute a final ruling but it will now be up to Apple to organize a defense to show that the allegations are unfounded.
The Commission initially focused on two points: the first in which it accuses Apple of forcing developers to use its in-app payment system for which it collects a fee (the “IAP obligation”); the second in which the company is accused of having prevented developers from advertising alternative ways to subscribe to their apps.
With this formal document, which the Commission usually sends to the parties involved to inform them of the objections raised against them in the context of an antitrust investigation, the executive declared that will no longer take a position on the first point, the one related to in-app payments, but will focus mainly on the rules imposed on developers.
According to the Commission, these rules, in breach of Article 102 of the Treaty on the Functioning of the European Union (“TFEU”), should be considered “unfair trading terms”, “neither necessary nor proportionate”, which would affect users “limited in their effective choice” who would probably end up paying more for a service.
It will now be up to Apple to try to defend itself against these allegations. If convicted, the company faces a fine of up to 10 percent of its global annual turnoverup to $39.4 billion based on 2022 revenue of $394.33 billion.
Last month, several European companies including Spotify, among the first to sue Apple for anti-competitive practices, had urged the Commission to hasten its investigation and act with “quick and incisive” action.
Apple’s comment on the Commission’s decision was not long in coming:
Apple will continue to work with the European Commission to understand and address their concerns, while promoting competition and choice for European consumers. We are delighted that the Commission has narrowed its case and is no longer challenging Apple’s right to levy a fee for digital goods and require the use of in-app payment systems users trust. The App Store helped Spotify become the leading music streaming service across Europe and we hope the European Commission puts an end to a baseless complaint.
