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 2021-05-01 Sam Schechner

Context & Ripple Effects

The charge is the formal escalation of a dispute that began with Spotify's complaint to the European Commission and led to an EU antitrust probe into App Store fees. Reporting in March had already indicated the Commission was preparing the case against Apple’s rules for competing music services.

The Commission is now applying that inquiry to Apple’s in-app payments requirement, making the App Store’s treatment of music-streaming rivals—not merely Spotify’s original complaint—the central competitive issue.

First-order effects

Apple must defend its in-app payment rules against the Commission’s allegation that they distorted competition among music-streaming services.
Rival music-streaming apps gain a formal EU challenge to the payment requirement and commissions they say constrain their ability to compete with Apple’s service.

Second-order effects

The case puts Apple’s terms for music apps under direct regulatory scrutiny, increasing pressure on the company to justify why rivals must use its payment system.
Other app developers with business models exposed to App Store commissions gain a closely watched enforcement test of platform payment rules, even though the charge concerns music streaming.

Third-order effects

If the Commission’s theory prevails, EU enforcement would treat a platform’s control of payments as a competition issue when the platform also competes with the apps using it.
The dispute points toward more active oversight of App Store rules for competing music services, with gatekeeper payment terms becoming a recurring focus of platform regulation.

The trend: European competition enforcement is increasingly testing whether platform owners can require payment intermediation from app businesses that compete on the same platform.

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/...
@joe_stover Joe Stover on x
@econosopher @benthompson Agreed. It would be like walking into Home Depot and seeing a sign that says the exact same SKU is cheaper at Lowes... However, I do think the app store needs a reckoning for their business practices...
@dhh @dhh on x
Hopefully @vestager and team will have realized that fines alone do worse than nothing, they simply price the monopoly violations. Need a direct decree to allow Spotify and other app makers to use their own billing systems.
@ianbetteridge Ian Betteridge on x
If you're a company leader and, while a third of your staff are leaving, you're spending your time on Twitter retweeting a load of stuff about how nasty Apple is, I would venture to suggest that your priorities are fucked up beyond recognition. https://twitter.com/...
@alexhern Alex Hern on x
it's really minor but it feels worth noting that Spotify does in fact pay $100 a year to be in the App Store, as does every other app developer https://twitter.com/...
@samifathi_ Sami Fathi on x
Spotify has told the EU that Apple is “anti-competitive,” but yet, Spotify are the ones that have not yet adopted support for HomePod. Nothing is stopping them. https://twitter.com/...
@viticci Federico Viticci on x
This tweet from 2019 on Apple Music being anticompetitive aged quite well. Will be interesting to see if Apple will be forced to implement any changes to App Store payment structure. Today's EU announcement is just a preliminary conclusion. https://twitter.com/... https://twitter…
@chrismlacy Chris Lacy on x
Here I was thinking that once I obtained an item from a store, that store has no rights to continue to enforce rules and usage of that item post-transaction. 🤔 Apple employing such deeply flawed analogies in its official statements says a lot. https://www.theverge.com/... https:/…
@jason_kint Jason Kint on x
Congrats, all four companies now have antitrust charges against them. Here are the size of case rankings: 1) Google 2) Facebook 3) Amazon 4) Apple and against Facebook's deepest wishes, the Apple case has nothing to do with IDFA and user data. :) https://www.wsj.com/...
@neil_chilson Neil Chilson on x
EU “preliminary conclusions” sure sound like “We've definitely decided.” https://twitter.com/...
@chrismessina @chrismessina on x
In 2004, Firefox launched to take back the web from Microsoft, whose monopoly gave its web browser an unfair advantage. Today the @EU_Commission asserted that it believes Apple's control over gives @AppleMusic a similar unfair advantage over audio content. Let the games begin. ht…
@benedictevans Benedict Evans on x
Memo to Apple: talking about how many apps are on your platform, and saying that people are free to switch to other platforms, will work precisely as well for you today as it did for Microsoft 20 years ago. That is to say - don't bother.
@counternotions Kontra on x
“The problem goes far beyond the App store, it's about Apple's control over the operating system itself.” (Now it's become a crime to have an essentially open-source OS that a company “controls”...on its own hardware. What comes after phone charger mandate, CPU diktat? Nuts.)
@benthompson Ben Thompson on x
This is wrong. What Apple is banning is *not* copy in the App Store. In this analogy they are banning a product in Home Depot from putting its website on the box or in the instruction manual. https://twitter.com/...
@fosspatents Florian Mueller on x
For some time I was concerned Spotify's case might ultimately just help those who compete with Apple on subscription services (and that's only a few of us), but over time I realized it's really a great vehicle for moving the goal posts in the right direction. Congrats @horaciog .…
@markgurman Mark Gurman on x
And on the eve of its trial with Epic, Apple is hit with a European antitrust complaint regarding App Store fees. Apple's “significant market power cannot go unchecked,” EU says. Details from ⁦@aoifewhite101⁩ ⁦@StephanieBodoni⁩ https://www.bloomberg.com/...
@benthompson Ben Thompson on x
In case there was any doubt, Apple is explicit that they view iOS apps — not App Store listings, but the app itself — as their property. https://twitter.com/...
@alexhern Alex Hern on x
https://www.theverge.com/... this feels like the right approach. Attacking bundling is always going to be hard - is it unfair competition to include a browser with a computer? Or to include the ability to unzip files? - but with non-technical differences in treatment, that's fair…
@benedictevans Benedict Evans on x
I wrote about App Store regulation. We've been arguing about app stores for a decade, but now the EU is going to change the rules. Will that actually matter, or is it just a $10bn wealth transfer to a few games companies? https://www.ben-evans.com/...

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