The European Union has sent a new statement of objections to Apple as part of its investigation into complaints made about the tech giant’s App Store rules, most notably by Spotify.
Spotify – and many other app makers – object to Apple’s rules regarding in-app payments on iOS devices. Those rules say that Apple’s own commission-charging transactions platform must be used and that alternative payment options – for example on an app maker’s website – cannot be linked to or even signposted from within the app.
The allegation is that these rules are anti-competitive, especially when applied against a company like Spotify that is a direct rival of one of Apple’s own services.
Spotify and others – especially Fortnite maker Epic Games – have called on regulators and courts around the world to intervene, so to force Apple to relax or remove the rules regarding in-app payments. The tech giant has made some concessions around sign-posting alternative payment options, though Spotify et al continue to call for bigger reforms.
For its part, Spotify took its grievances to the EU’s competition regulator in 2019. In 2021, the European Commission sent a statement of objections to Apple, basically siding with Spotify and expressing concerns that the App Store rules around in-app payments and signposting alternative payment options were anti-competitive.
Spotify obviously welcomed that development, but has since become annoyed that the EC’s investigation hasn’t progressed much beyond the 2021 statement and some behind-the-scenes conversations between officials and Apple reps. So much so, Spotify last month joined with a bunch of other app makers, including Deezer, to formally call on the EC to get a move on.
Doing some moving on, the EC yesterday sent Apple a new statement of objections. In it, it says that it is now focusing specifically on the rules stopping the sign-posting of alternative payment options, what are sometimes called anti-steering obligations. Those rules, it confirms, continue to cause completion law concerns despite Apple’s responses to the original statement of objections from 2021.
The EC says that in its new statement of objections it no longer takes “a position as to the legality” of the rules forcing app makers to use Apple’s own systems for in-app payments, and instead “focuses on the contractual restrictions that Apple imposed on app developers which prevent them from informing iPhone and iPad users of alternative music subscription options at lower prices outside of the app and to effectively choose those”.
“The Commission takes the preliminary view that Apple’s anti-steering obligations are unfair trading conditions in breach of Article 102 of the Treaty On The Functioning of the European Union”, it goes on.
“In particular”, it adds, “the Commission is concerned that the anti-steering obligations imposed by Apple on music streaming app developers prevent those developers from informing consumers about where and how to subscribe to streaming services at lower prices”.
“These anti-steering obligations are neither necessary nor proportionate for the provision of the App Store on iPhones and iPads; are detrimental to users of music streaming services on Apple’s mobile devices who may end up paying more; and negatively affect the interests of music streaming app developers by limiting effective consumer choice”.
Apple will now have to respond to the new statement of objections, after which the EC will decide what action to take. Though, it was keen to remind everyone yesterday, there is no deadline on an investigation of this kind, so who knows when that will happen.
Given that the new Digital Services Act in the EU also impacts on these Apple rules, the enforcement of those new regulations might bring about some changes anyway before the EC has reached a conclusion on this investigation. Though, even if that happens, the EC could still fine Apple for past violations of European law, anywhere up to 10% of the company’s annual worldwide turnover, which would be quite a lot.
Commenting on all this yesterday, Spotify said: “The European Commission has once again made it abundantly clear that consumers are the ultimate victims of Apple’s abusive and anticompetitive behaviour – and putting a stop to it is a top priority”.
“Apple’s anti-steering rules, which prohibit Spotify and other developers from telling consumers about deals or promotions through their own apps, mean that users are deprived of opportunities to save money and enjoy a higher quality service. That directly harms consumers”.
“With each passing day, Apple continues to choke competition and smother innovation. The European Commission today is sending a clear message that Apple must play fair and let competition work. Momentum is on the side of consumers but they deserve final resolution – and soon”.