EU accuses Apple of over-charging rival streaming services

Friday, April 30

The European Commission has accused Apple for what it considers to be anti-competitive behaviour against music streaming services, such as Spotify.

The Commission believes Apple violates EU competition law because it charges "high commission fees on rivals in the App store and forbids them to inform of alternative subscription options". This situation, Brussels said, leads to "consumers losing out". The executive's conclusions are preliminary.

The App store connects app developers from all around the world with users of Apple devices. Today, the App store hosts almost 2 million apps, some of which offer services similar to apps designed by Apple itself. Apple has its own streaming service, called Apple Music.

The legal action was announced on Friday by Margrethe Vestager, European Commissioner for Competition, who has led other battles against the tech giant in the past.

The new case follows a complaint filed two years ago by Spotify, which is based in Sweden.

"Today is a big day. Fairness is the key to competition. With the [European Commission's] 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," wrote Daniel Ek, the CEO and Founder of Spotify, on Twitter.

"Apple’s actions are damaging not only to Spotify, but to the entire ecosystem of app developers," added Horacio Gutierrez, Spotify's chief legal officer.

For its part, Apple expressed its opposition to the Commission's legal reasoning.

"Spotify has become the largest music subscription service in the world, and we’re proud of the role we played in that," Apple said in a statement reacting to the news.

"Once again, they want all the benefits of the App Store but don’t think they should have to pay anything for that. The Commission’s argument on Spotify’s behalf is the opposite of fair competition."

Last year, the Commission lost a high-profile case against Apple related to state aid. The executive argued that the multinational was unlawfully benefiting from a special tax rate agreement that it had reached with the Irish authorities. The Commission was asking €13 billion in back taxes, but the EU’s General Court ruled the reasoning presented was not strong enough to guarantee such massive repayment.