The European Commission has announced that it has formally issued a no-confidence motion against Apple, saying today that its initial view is that Apple’s App Store rules distort the market competition for music streaming services by increasing the cost of competitive music streaming application developers. Last summer the commission began investigating competitive concerns regarding the iOS App Store (and Apple Pay).
“The Commission has taken into account the mandatory use of Apple’s own app purchasing process imposed on music streaming app developers to distribute their apps through Apple’s App Store,” the commission wrote today. “The Commission is further concerned that Apple imposes certain restrictions on app developers to prevent them from informing iPhone and iPad users about the possibility of cheaper, cheaper purchases.” The statement of objection focuses on two rules that Apple has imposed in its agreement with music streaming app developers: the mandatory requirement to use its proprietary App-Purchase System (IAP) to distribute paid digital content (with the commission stating that it carries a charge). 30% commission fee on all subscriptions purchased through IAP); and ‘anti-steering provisions’ that restrict developers from informing users about alternative purchase options.
“The commission’s investigation found that most streaming providers were able to eliminate users by raising this fee [Apple’s 30% cut],” he said. Users are often cheap about the possibilities of making such purchases.
The commission has expressed concern that users of Apple devices pay significantly more for their music subscription services or are barred from buying certain subscriptions directly into their apps.” Commenting in a statement, Margaret Vestager, head of EVP and competition, added: “App stores play a central role in today’s digital economy. We can now do our shopping, access news, music or movies through apps instead of visiting websites. Our initial search is the gatekeeper for iPhones and iPads users through the Apple App Store. With Apple Music, Apple competes with music streaming providers.
Disadvantages to competitive music streaming services By imposing strict rules on the App Store, Apple deprives users of the choice of cheap music streaming and distorts competition. This is done by charging a high commission fee on every transaction in the App Store for competitors and informing their customers about the optional subscription option.”