In April of 2021, the EU’s European Commission formally accused Apple of distorting “competition in the music streaming market.” Now, amid continued pressure from Spotify and others, the Commission has further narrowed its antitrust probe to focus on App Store rules’ impact on streaming platforms.
This latest development in the years-running Apple investigation, which kicked off after Spotify submitted a complaint in early 2019, came to light in a modified European Commission statement of objections (and a corresponding announcement message) today.
For background, Spotify and others have long criticized App Store policies and fees, and Apple has, predictably, pushed back against the Stockholm-headquartered company’s qualms. But with four years having passed since Spotify filed its EU complaint against Apple, Daniel Ek last year personally visited Brussels in an effort to “accelerate” the case.
Meanwhile, Deezer (which is looking to dramatically increase its revenue by 2025) joined Spotify at 2023’s start in urging the Commission to take “swift and decisive action” against Apple’s “anticompetitive and unfair practices.”
Bearing in mind the latter pressure, the European Commission is zeroing in on the App Store’s impact specifically on streaming services, as mentioned at the outset.
As part of the recalibrated investigation, the Commission has relayed that it will “no longer take a position as to the legality of the IAP [in-app purchase] obligation,” or Apple’s requiring that developers utilize “its own in-app purchase payment technology.” (The iPhone developer made certain related concessions for “reader” apps including Spotify in 2021, but the streaming platform maintained that the changes didn’t go far enough.)
Rather, the Commission’s antitrust probe now focuses on “contractual restrictions” that allegedly prevent developers “from informing iPhone and iPad users of alternative music subscription options at lower prices outside of the app,” per a release that the EU executive branch published this morning.
“The Commission takes the preliminary view that Apple’s anti-steering obligations are unfair trading conditions in breach of Article 102 of the Treaty on the Functioning of the European Union (‘TFEU’),” the text indicates of the updated investigation’s legal basis.
Moreover, said “anti-steering obligations” are “detrimental” to music streamers (“who may end up paying more”) and “negatively affect the interests of music streaming app developers by limiting effective consumer choice,” according to the Commission.
In closing, the government entity took the opportunity to reiterate that there’s “no legal deadline for bringing an antitrust investigation to an end,” besides emphasizing that it can fine Apple as much as 10 percent of its “annual worldwide turnover” should “sufficient evidence of an infringement” come to light.
During the final three months of 2022 alone, Apple reported revenue of $117.2 billion – a figure that reflects a roughly five percent year-over-year (YoY) decline. Included in the sum is nearly $21 billion from services such as Apple Music.