EU to launch formal antitrust investigation into Apple after Spotify complaint

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The European Commission will launch a formal antitrust investigation into Apple in the next few weeks after Spotify accused the iPhone maker of “tilting the playing field to disadvantage competitors”.

In March, Spotify filed an official antitrust complaint against Apple in Europe, contending that Apple unfairly limits choice and competition through the rules of its app store.

Spotify’s complaint centres on Apple’s policy of charging digital content providers a 30 per cent fee for using its payment system for subscriptions sold in its App Store. The policy applies to Spotify and other music subscription services but not apps, such as Uber.

After considering the complaint and surveying customers, rivals and others in the market, the EU competition commission has decided to launch a formal antitrust investigation into Apple’s conduct, according to people familiar with the probe.

EU enforcers can require companies to change business practices they deem unlawful and levy fines of up to 10 per cent of a company’s global turnover. The investigations have no set deadlines and can take years to resolve. However, companies can speed up the process and avoid fines by offering to settle the probes with binding promises of behavioural change.

As an example of Apple’s allegedly unfair practices, Spotify cited the 30% tax that Spotify and other digital services must pay on purchases made through Apple’s payment system, including when Spotify users upgrade from Free to Premium packages.

The company said that that put Spotify in the untenable position of having to raise prices for its customers, which it refuses to do.

Back in March, Apple stated,

“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,”  

Apple and Spotify both declined to comment today.

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