The European Commission today announced it has opened two formal antitrust investigations into Apple’s App Store and Apple Pay contactless payment system.
The App Store investigation will determine whether Apple’s rules for app developers concerning the distribution of apps through the App Store violates European Union competition rules.
The investigation will focus on the mandatory use of Apple’s in-app purchases system and how Apple restricts developers from informing iPhone and iPad users of cheaper subscription alternatives outside of the in-app purchases.
The investigation was spurred by separate complaints by Spotify and ebook distributor Kobo on how App Store rules on competition in music streaming and e-books/audiobooks have impacted them.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Mobile applications have fundamentally changed the way we access content. Apple sets the rules for the distribution of apps to users of iPhones and iPads. It appears that Apple obtained a ‘gatekeeper’ role when it comes to the distribution of apps and content to users of Apple’s popular devices. We need to ensure that Apple’s rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books. I have therefore decided to take a close look at Apple’s App Store rules and their compliance with EU competition rules.”
Spotify had filed a complaint with the European Commission, claiming Apple doesn’t share customer information with vendors, takes a bigger cut of the action than they should, and unfairly limits third-party access to Apple Watch, Siri, HomePod and other Apple-owned technologies.
The Apple Pay investigation comes on the heels of a preliminary EC investigation into concerns regarding Apple’s terms, conditions, and other measures related to the use of Apple Pay that may discourage competition, as well as reducing choice and innovation. The issue is based on how Apple Pay is the only mobile payment solution that can access the NFC “tap and go” technology in the iPhone and Apple Watch for in-store payments.
A spokesperson for Apple gave the following statement about the investigation:
“We developed the App Store with two goals in mind: that it be a safe and trusted place for customers to discover and download apps, and a great business opportunity for entrepreneurs and developers.
“We’re deeply proud of the countless developers who’ve innovated and found success through our platform. And as we’ve grown together, we’ve continued to deliver innovative new services — like Apple Pay — that provide the very best customer experience while meeting industry-leading standards for privacy and security.
“It’s disappointing the European Commission is advancing baseless complaints from a handful of companies who simply want a free ride, and don’t want to play by the same rules as everyone else. We don’t think that’s right — we want to maintain a level playing field where anyone with determination and a great idea can succeed.”