Apple will be formally investigated by the European Commission over Spotify accusations that the Cupertino company uses the App Store to deliberately disadvantage other app developers.
Spotify in March filed an antitrust complaint against Apple with the EU claiming Apple isn’t sharing customer information with vendors, takes a bigger cut of the action than they should, and unfairly limits third-party access to Apple Watch, Siri, HomePod and other Apple-owned technologies. It also argued that Apple enforced App Store rules that “purposely limit choice and stifle innovation at the expense of the user experience.”
The Financial Times reports the EU competition commission has decided to launch a formal antitrust investigation into the charges “in the next few weeks” after surveying customers, rivals and others in the market.
Following Spotify’s accustation, Apple fired back, labeling Spotify’s complaint as “misleading rhetoric,” adding that Spotify “wants all the benefits of a free app without being free.”
Spotify described the 30% commission taken by Apple on in-app purchases made in apps from the App Store as a “tax.” The music services said the tax forces the service to “artificially inflate the price of our Premium membership well above the price of Apple Music.”
Spotify says it has to charge existing subscribers $12.99 per month for its premium subscription plan, through the App Store, simply to collect its standard $9.99 per month charge.
In a post on the Spotify blog, company CEO Daniel Ek claimed the policy gives Apple an “unfair advantage,” as Spotify cannot compete with Apple Music’s $9.99 per month charge.
The EU could force Apple to change their business practices if they deem them to be unlawful, and hit Apple with fines of up to 10% of the company’s global income. An EC investigation can take years to resolve, or the companies can choose to settle by making legally binding agreements to make a change in their behavior.
