The European Commission will launch a formal investigation into Apple for anti-competitive behaviour, according to a Financial Times report.
This follows the antitrust complaint filed back in March by rival music streaming service, Spotify, accusing Apple of using its role as owner of the widely-used App Store to boost its own music streaming service.
Currently, Apple charges a 30% fee on paid apps and in-app purchases within the App Store. This applies to subscription services such as Spotify sold within the store, however other apps, such as Uber, are exempt from this charge.
However, Spotify co-founder and CEO, Daniel Ek, wrote in a blog post that this charge would force the company to increase the price of its premium membership in comparison to Apple’s own streaming service, Apple Music. He argued that this “tax” would reduce the competitiveness of Spotify, giving Apple an “unfair advantage”.
If Spotify does not pay the 30% charge, it will be subject to restrictive measures, such as limiting its communication with customers.
Apple’s official statement in response to the complaint emphasised the company’s contribution to Spotify’s success. “We’re proud of the work we’ve done to help Spotify build a successful business reaching hundreds of millions of music lovers,” the statement reads. “After using the App Store for years to dramatically grow their business, Spotify seeks to keep all the benefits of the App Store ecosystem — including the substantial revenue that they draw from the App Store’s customers — without making any contributions to that marketplace.”
The investigation is likely to last several years. If the 30% fee is found to be unlawful, Apple could face significant fines on its global revenue unless it changes its behaviour.
This will be the second investigation into Apple conducted by the European Commission in recent years. In 2017, the Competition Commissioner Margrethe Vestager ordered the company to pay billions in back taxes to the Irish government, after concluding that a deal allowing Apple to pay less tax than other businesses was illegal.