The European Commission said Tuesday that its antitrust investigation of Apple will no longer focus on in-app payment technology, but will instead focus on the “contractual restrictions” Apple imposes on Apple Music app developers that prevent them from informing iPhone and iPad These contracts prevent developers from informing iPhone and iPad users about cheaper music subscription options outside of the app.
Spotify first filed a complaint against Apple in 2019, and the European Commission opened an investigation in 2020. The commission issued a preliminary “Statement of Objections” against Apple in 2021, listing possible antitrust violations by Apple. The commission focused on two issues: Apple forcing developers to use its own in-app payment system, for which it charged a fee, and other ways Apple prevented developers from advertising subscriptions to its apps.
The European Commission did not explain why it dropped charges that Apple required developers to use its own in-app payment system, and while it dropped charges of monopolization of Apple’s in-app payment system and focused on charges against Apple Music, it did strengthen the wording of its charges against the latter by announcing a “preliminary view “that “Apple’s anti-steering mechanism is an unfair trading condition in breach of Article 102 of the Treaty on the Functioning of the European Union.”
Apple can now respond to the EU’s allegations. If Apple is found to have engaged in anti-competitive behavior, the company faces fines of up to 10 percent of its annual global turnover. Apple’s 2022 revenue is $394.33 billion, so that would be a fine of up to $39.4 billion (currently about RMB 273.83 billion).
For its part, Apple said it is pleased that the European Commission has narrowed the scope of its antitrust investigation and will respond to the EU’s concerns.
In a statement from Spotify, the company’s general counsel Eve Konstan said, “Today, the European Commission sent a clear message that Apple’s anti-competitive behavior and unfair practices have hurt consumers and disadvantaged developers for far too long. We urge the Commission to issue a swift decision, in this case, to protect consumers and restore fair competition to the iOS platform.”
Apple’s victory will be short-lived, however, as a new EU tech law called the Digital Market Act (DMA), which will apply from May, prohibits both of Apple’s aforementioned practices and imposes fines for infringement of up to 10 percent of the company’s global turnover.
Apple was up 0.05% premarket and Spotify was up 0.98%.