EU charges Apple with antitrust violations, alleging that Apple squeezed rival music streaming apps by requiring them to use its in-app payments system

EU accuses Apple of forcing many apps to use its in-app payment system on which it takes commissions, saying it ‘distorted competition’ in music streaming

Wall Street Journal 2021-04-30 Sam Schechner

Context & Ripple Effects

The case grew out of Spotify’s 2019 complaint to the European Commission, after which the EU opened a probe into Apple’s App Store fees and rules. By March 2021, reporting indicated the Commission was preparing charges focused on competing music-streaming services.

The formal accusation turns that long-running dispute into an enforcement case over whether Apple can require rival services to use its payment system. The later €1.8B Commission fine shows the complaint became a consequential test of App Store gatekeeping.

First-order effects

Apple must defend its App Store payment requirement in an EU antitrust proceeding centered on music-streaming rivals.
Music-streaming apps that compete with Apple gain a regulator-backed challenge to the commission-bearing payment route they say disadvantages them.

Second-order effects

Apple’s App Store commercial terms face greater pressure because the case tests whether payment rules can be used to favor a platform operator’s own service.
Other developers with subscription businesses gain a clearer enforcement reference point from a case built around Apple’s treatment of a direct category competitor.

Third-order effects

If the Commission’s theory is sustained, platform owners’ ability to combine app distribution, payment access, and first-party services faces tighter competition limits in Europe.
The case is part of a shift from reviewing individual platform fees toward examining whether gatekeeper rules alter competition in downstream digital services.

The trend: European antitrust enforcement is increasingly targeting the rules through which app-store gatekeepers shape competition among services that depend on their platforms.

Discussion

@vestager Margrethe Vestager on x
Our preliminary conclusion: @Apple is in breach of EU competition law. @AppleMusic compete with other music streaming services. But @Apple charges high commission fees on rivals in the App store & forbids them to inform of alternative subscription options. Consumers losing out.
@eldsjal Daniel Ek on x
Today is a big day. Fairness is the key to competition. With the @EU_Commission Statement of Objections, we are one step closer to creating a level playing field, which is so important for the entire ecosystem of European developers. https://twitter.com/...
@eu_commission European Commission on x
Our preliminary view is that Apple's rules distort competition in the market for music streaming services by raising the costs of competing music streaming app developers. More on our statement of objections to Apple → https://europa.eu/!nc46Dx Executive Vice-President @vestager …
@reckless Nilay Patel on x
The EU has found that Apple's App Store rules drive up music streaming prices. Apple's response is to... take credit for Spotify's success? https://www.theverge.com/... https://twitter.com/...
@pathedger18 Patrick Hedger on x
Thinly veiled protectionism on behalf of the only European tech company with a significant market cap. https://twitter.com/...
@pkafka Peter Kafka on x
Spotify gets a big antitrust victory against Apple in Europe. Epic's antitrust case against Apple starts Monday in the US. https://ec.europa.eu/...
@ikardanoff Inal Kardan on x
Let's imagine Apple will have to allow different payment options in the App Store - we'll see 1. crypto payment options, 2. games with tokenized in-game items and item marketplaces That's gonna be huge for the crypto industry. https://www.wsj.com/...
@ow @ow on x
Good to see Europe charge that Apple's App Store rules are anticompetitive. Along with the Epic/Fortnite case, a good outcome would be requiring Apple to allow competing payment gateways https://www.theverge.com/...
@dhh @dhh on x
“If found guilty, Apple could face a fine of up to 10% of its annual revenue and be forced to adjust its business practices, though it can also appeal any decision in court”. Okay, that'll do 😂 https://www.wsj.com/...
@9to5mac @9to5mac on x
@bzamayo Update: In response, Apple says “At the core of this case is Spotify's demand they should be able to advertise alternative deals on their iOS app, a practice that no store in the world allows.” https://9to5mac.com/...
@rasmusandresen @rasmusandresen on x
Full Support. @Apple is undermining fair competition for AppStores and music streaming. Consumers and European companies are losing. We need to ensure fair competition & protect consumer rights. #Apple #Spotify https://twitter.com/...
@markscott82 Mark Scott on x
Final thought: Apple's response to all of this is 1) app store costs, you gotta buy for up-keep; and 2) we compete w/ @Google, so there's lots of competition. Brussels already slapped down 2nd argument, and this is live footage from inside Google ahead of today's announcement htt…
@carlquintanilla Carl Quintanilla on x
(Reuters) - Apple Inc said on Friday that a case brought by European Union antitrust regulators accusing it of setting restrictive rules on its App Store was “the opposite of fair competition”. @Reuters $AAPL
@counternotions Kontra on x
Totally! Apple should create, operate and improve its platform at low/no cost to its competitors, and even help them circumvent its rules and subscription revenues. If Apple doesn't like it, it should be forced to cheat artists and track&sell users' data like its competitors. htt…
@carnage4life Dare Obasanjo on x
There are a bunch of rules in the App Store that exist to funnel companies into giving Apple a 30% cut. The Spotify example is most egregious because Apple Music directly competes with them. Many other app categories in a similar situation. Interesting. https://www.wsj.com/...
@ruskin147 Rory Cellan-Jones on x
https://ec.europa.eu/... European Commission says Apple “abused its dominant position for the distribution of music streaming apps through its App Store”. Follows complaint from Spotify
@horaciog Horacio Gutierrez on x
Apple's actions are damaging not only to Spotify, but to the entire ecosystem of app developers. That's why we filed a complaint against Apple with the @EU_Commission, and that's why today's Statement of Objections is great news for consumers and developers around the world. http…
@adrianweckler Adrian Weckler on x
European Commission says Apple's App Store is anti-competitive. This will be a tough one for Apple to defend. https://twitter.com/...
@donal_cahalane @donal_cahalane on x
More and more it getting frightening just how much politicians fail to understand technology and apply old style thinking to modern business challenges. All this decision does is ensure the death of platforms and leave us all stuck with two software ecosystems - iOS and Android h…
@markdistef Mark Di Stefano on x
🚨 There it is. Spotify with first blood against Apple in Europe. https://twitter.com/...

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