EU: Apple violates competition law; can be fined up to $ 27 billion



It’s going to be a busy morning for Apple lawyers. The European Commission has completed that Cupertino’s technical giant has “distorted competition in the music streaming market by abusing its dominant position in the distribution of music streaming applications through the App Store”.


The EU Commission is looking at two factors – the mandatory use of Apple’s own in-app purchasing mechanism for third-party music streaming applications, and the fact that app developers have no way of informing users about other purchasing options outside of apps.

Under EU competition law, these are anti-competitive practices, so the Commission has already issued a competition law to the company.

In simple terms, Apple charges a 30% fee to third-party app developers for using in-app purchases. Fees are mandatory, which means apps like Spotfy can’t avoid them, and they have to turn to customers to make up for the losses on their behalf.
This has already been reflected upgrade Spotify Premium subscription products globally, as reported earlier this week. Spotify’s role in this controversy is critical, as the music streaming giant left about two years ago the so-called “Apple tax” competition law.

Apple’s immediate response

Of course, Apple gets a chance to address the allegations, but at this point, things don’t look particularly clear to Tim Cook and the company.

In response to the European Commission’s findings, Apple said:

Margrethe Vestager, Vice-President of the European Commission for Fair Competition, said Apple’s App Store has become too large a part of today’s digital economy to ignore such potentially unfair business mechanisms. He calls Apple “a gatekeeper for iPhone and iPad users through the App Store” iPhonemanufacturer as a monopolistic company.

In a music streaming discussion, Margrethe Vestager says:


If Apple is found guilty, the potential fines could be as high as $ 27 billion, or 10% of the company’s annual revenue. More importantly, a company is likely to have to change its “business mechanisms” if it is to continue to provide certain services in the EU.

Spotify lawyer Horacio Gutierrez welcomes the EU’s response, saying this is only the first (critical) step towards holding Apple accountable for anti-competitive behavior. He wants a level playing field for all app developers competing with Apple in their own App Store.

None of this is particularly shocking. Other large companies such as Rakuten and Epic games (Fortnite developer) is also suing Apple for similar reasons.
Speaking of competition, Tile seems to be Apple’s next “victim”. The tracker maker will soon face stiff competition from Apple’s own AirTagit, which is tightly integrated into the company’s ecosystem, making it very difficult for Tilen to maintain its current position in the market.

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