European Commission launches antitrust probes over Apple's App Store and Apple Pay
The EU's antitrust authorities has officially launched two investigations into Apple, specifically surrounding the App Store and with Apple Pay.
The EU is investigating how Apple Pay is the only system allowed to use the contactless payment technology in iPhones
Apple is now facing formal investigation into alleged anticompetitive practices over both the App Store and Apple Pay. The European Union's antitrust authority has announced the two conduct investigations, and this is the start of a process that potentially could lead to Apple being fined up to 10% of its annual revenue.
"It appears that Apple sets the conditions on how Apple Pay should be used in merchants' apps and websites," said EU Executive Vice-President Margrethe Vestager in a statement. "It also reserves the "tap and go" functionality of iPhones to Apple Pay."
"It is important that Apple's measures do not deny consumers the benefits of new payment technologies, including better choice, quality, innovation and competitive prices," she continued. "I have therefore decided to take a close look at Apple's practices regarding Apple Pay and their impact on competition."
In a separate announcement about the App Store investigation, Vestager said that Apple appears to have created a "gatekeeper" role for itself regarding "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," she said.
Apple has responded to the investigation with a very brief statement, critical of the complainants and the European Commission itself.
"It is 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," Apple said to AppleInsider and other venues.
These two probes follow on from complaints by Spotify that Apple allegedly employs restrictive and anticompetitive rules for developers on the App Store. Spotify filed its complaint in 2019 and Apple has publicly denied its accusations. That Spotify complaint has most recently been followed by the Japanese retail firm Rakuten, which has now made an antitrust complaint to the EU against Apple.
The EU has not announced any timescale for the investigations, and together with any possibly court cases, the probes are likely to take several years.
The EU is investigating how Apple Pay is the only system allowed to use the contactless payment technology in iPhones
Apple is now facing formal investigation into alleged anticompetitive practices over both the App Store and Apple Pay. The European Union's antitrust authority has announced the two conduct investigations, and this is the start of a process that potentially could lead to Apple being fined up to 10% of its annual revenue.
"It appears that Apple sets the conditions on how Apple Pay should be used in merchants' apps and websites," said EU Executive Vice-President Margrethe Vestager in a statement. "It also reserves the "tap and go" functionality of iPhones to Apple Pay."
"It is important that Apple's measures do not deny consumers the benefits of new payment technologies, including better choice, quality, innovation and competitive prices," she continued. "I have therefore decided to take a close look at Apple's practices regarding Apple Pay and their impact on competition."
In a separate announcement about the App Store investigation, Vestager said that Apple appears to have created a "gatekeeper" role for itself regarding "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," she said.
Apple has responded to the investigation with a very brief statement, critical of the complainants and the European Commission itself.
"It is 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," Apple said to AppleInsider and other venues.
These two probes follow on from complaints by Spotify that Apple allegedly employs restrictive and anticompetitive rules for developers on the App Store. Spotify filed its complaint in 2019 and Apple has publicly denied its accusations. That Spotify complaint has most recently been followed by the Japanese retail firm Rakuten, which has now made an antitrust complaint to the EU against Apple.
The EU has not announced any timescale for the investigations, and together with any possibly court cases, the probes are likely to take several years.
Comments
(Interesting side note: Without AT&T we may not have ever had an Apple as hacking into its systems with their blue box was Steve & Woz's first taste producing a marketable product together)
Edited: change bad word to “bleep”
Wait, is that projection? Let's find out. Who exactly made those rules? Could it be ... Apple?
So based on that statement, Apple should fully embrace new rules by the EU and the USA governments that require phones to be open to third party app stores and support the right to repair your device at an independent shop. After all, Apple should not be given a free ride and should have to play by the same rules as everyone else, right Apple?
I doubt the EU can be viewed as market libertarians. But on a wide range of subjects they often express a genuine concern for a "level playing field". I think they are going to investigate this under that lens. We'll see what comes out. The perceived problem with the technology sector is that in many areas it is often winner-takes-all. The argument against curtailing the leader is that it slows down progress to force competition. Maybe there is a balance to be found once the innovator's position is extremely well established, and I doubt the innovator would ever do it without a bit of prodding.
Out of interest, do you see allowing other payment systems threatening interference with the security and peace that ApplePay gives you? I'm not seeing it.
I think the public should gatecrash the commissioners private parties to show how forced openness feels.
It’s 30% in the first year. Thereafter it is 15%. Aren’t too many businesses that can run on 15% revenue to cover costs. The problem for Spotify is that being charged anything at all is inconvenient to its business model.