EU charges Apple over ‘dominant position’ in the App Store

30 Apr 2021132 Views

Image: © Nikolay N. Antonov/Stock.adobe.com

The European Commission has focused on the 30pc commission fees charged on apps like Spotify that compete directly with Apple Music.

The European Commission has accused Apple of anti-competitive behaviour with its high commission fees in the App Store.

The Commission said that it found Apple to be in a “dominant position” with its practices. It believes the fees that Apple charges in the App Store are anti-competitive as the company’s own apps are available in the store too.

It singled out the Apple Music app and its competition with other music streaming apps. Apple charges high commission fees – such as a 30pc charge on transactions – on other apps, giving its own app an unfair advantage, according to EU competition commissioner Margrethe Vestager.

The Commission also objected to “anti-steering provisions” that prevent app developers from informing users of alternative means to access and pay for their apps.

This stems from a complaint filed by Spotify two years ago, which took issue with what it perceived as an unfair playing field. Rakuten followed suit last year with a similar complaint around commission fees on e-books.

“With Apple Music, Apple also competes with music streaming providers. By setting strict rules on the App Store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition,” Vestager said.

Support Silicon Republic

“This is done by charging high commission fees on each transaction in the App Store for rivals and by forbidding them from informing their customers of alternative subscription options.”

Apple has yet to respond to the charges.

It’s the next salvo in the ever-growing pressure for Apple to alter the way that it generates revenue from the App Store.

It recently reduced the commissions for smaller developers – that make less than $1m in revenue a year – to 15pc.

In the most high-profile tiff, Epic Games, the company behind Fortnite, is engaged in a court battle with Apple over the 30pc fees and filed its own complaint in Europe.

The European Commission’s moves come the same week that Apple released its new iOS updates, which bolstered privacy for users but has opened up a fierce debate with app developers and other companies around its fairness.

Meanwhile, Apple reported quarterly revenues of $89.6bn this week.

Jonathan Keane is a freelance business and technology journalist based in Dublin

editorial@siliconrepublic.com