Apple Refuses to Comply with EU’s Antitrust Investigation of Spotify
Apple Inc. is preparing for a confrontation with European Union antitrust regulators, asserting that it does not have to implement any further modifications to its App Store. This comes after the company faced formal accusations regarding its treatment of competitors in the music streaming industry, including Spotify Technology SA.
Ahead of a hearing in Brussels on Friday, the iPhone maker claims it was unfairly accused by the EU of having illegal restrictions similar to Spotify’s that prevent developers from driving users away from the App Store.
Apple believes it has already addressed potential competition concerns over the past two years with changes that strike a fair balance between the interests of Apple and app developers, according to a person familiar with the U.S. company’s thinking, who spoke on condition of anonymity.
The EU issued a revised charge sheet to Apple in February that showed the commission had narrowed its investigation, but still focused on “contractual restrictions Apple imposed on app developers that prevent them from informing iPhone and iPad users about alternative music subscription options.”
Spotify says Apple’s anti-directive rules prohibit it and other developers from “notifying consumers of any offers or promotions through their own apps.”
“These rules are still in effect today, and Apple’s purported changes do not actually change anything and are for demonstration purposes only,” Spotify said in a statement. “We support the European Commission and believe that the ‘charge sheet’ addresses Apple’s unfair business practices.”
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Spotify has been one of Apple’s harshest critics, pressuring the EU’s antitrust authority to take action by complaining about Apple’s unfair cut of its subscription fees. The commission declined to comment.
Earlier this year, Apple held a separate hearing in the EU’s second antitrust investigation into its tap-to-pay technology. In that case, the commission claims the tech company is abusing its control over mobile wallets by limiting how third-party companies can offer services on the iPhone.
Regulators have since asked retailers a series of questions that have explored other payment solutions on mobile devices. A hearing in February addressed some of the issues the commission was investigating, but no formal remedies have been issued so far, the person said.
Apple faces fines of up to 10 percent of annual sales if it fails to convince the Commission of its claims in either case and competition authorities conclude that EU rules have been breached – although penalties rarely rise to such levels. The commission does not have a statutory deadline for completing the investigation.
The antitrust investigations coincide with new EU rules that will curb the activities of US technology companies in the region. Measures that work alongside traditional competition powers aim to prevent companies from abusing their power as gatekeepers of digital technology.
