Tech giant Apple is the target of two EU antitrust investigations into its App Store and Apple Pay as regulators said its terms and conditions and restrictions may violate the bloc’s competition rules, reported The Financial Times.
The investigation into the App Store comes after a complaint from Spotify in March 2019 and a subsequent complaint from ereader company Kobo, over how Apple takes a 30 percent commission on every subscription signed up through its App Store in the first year, and then a 15 per cent cut.
At the same time, the companies complained, Apple has promoted its own music and books services. The European commission is also looking at whether App Store rules stifle competition in gaming and cloud services, according to people with direct knowledge of the situation. Apple’s global App Store fees are estimated to generate more than $1bn for the company every month.
Apple said in January that consumer spending on the App Store hit a new single-day record of $386m on January 1, likely generating $50m to $100m for Apple itself.
The EU stated that,following a preliminary investigation, “the commission has concerns that Apple’s restrictions may distort competition for music streaming services on Apple’s devices”.
It added that by forcing companies to sell to customers through Apple’s own in-app payments system, Apple seemed to have “full control over the relationship with customers of its competitors”.
The commission stated that Apple appeared to cut off its rivals from data about their customers and was able to obtain “valuable data about the activities and offers of its competitors”. “Apple sets the rules for the distribution of apps to users of iPhones and iPads. It appears that Apple obtained a ‘gatekeeper’ role when it comes to the distribution of apps and content to users of Apple’s popular devices,” said Margrethe Vestager, the EU’s competition chief.