The European Commission has sent a Statement of Objections to Apple clarifying its concerns over App Store rules for music streaming providers.
The European Commission is the politically independent executive arm of the European Union. It’s goal is to “promote the general interest of the EU by proposing and enforcing legislation as well as by implementing policies and the EU budget.”
The new procedural step follows the Commission’s Statement of Objections that outlined the Commission’s preliminary view that Apple abused its dominant position by: (i) imposing its own in-app purchase payment technology on music streaming app developers (“IAP obligation”, and (ii) restricting app developers’ ability to inform iPhone and iPad users of alternative music subscription services (‘anti-steering obligations’).
All this goes back to March 13, 2019 when, Spotify filed an anti-competition complaint about Apple with the EU, claiming the Cupertino, California-based company limited innovation and constraining user choice by refusing to allow Spotify and other firms access to technology and information via the App Store. Two days later Apple released the following statement addressing Spotify’s claims: We believe that technology achieves its true potential when we infuse it with human creativity and ingenuity. From our earliest days, we’ve built our devices, software and services to help artists, musicians, creators and visionaries do what they do best.
Sixteen years ago, we launched the iTunes Store with the idea that there should be a trusted place where users discover and purchase great music and every creator is treated fairly. The result revolutionized the music industry, and our love of music and the people who make it are deeply engrained in Apple.
Eleven years ago, the App Store brought that same passion for creativity to mobile apps. In the decade since, the App Store has helped create many millions of jobs, generated more than $120 billion for developers and created new industries through businesses started and grown entirely in the App Store ecosystem.
Today’s Statement of Objections clarifies that the Commission no longer takes a position as to the legality of the IAP obligation for the purposes of this antitrust investigation, but rather focuses on thecontractual restrictions that Apple imposed on app developers which prevent them from informing iPhone and iPad users of alternative music subscription options at lower prices outside of the app and to effectively choose those.
The Commission takes the preliminary view that Apple’s anti-steering obligations are unfair trading conditionsin breach of Article 102 of the Treaty on the Functioning of the European Union (‘TFEU’).
In particular, the Commission says it’s concerned that the anti-steering obligations imposed by Apple on music streaming app developers prevent those developers from informing consumers about where and how to subscribe to streaming services at lower prices. These anti-steering obligations: (i) are neither necessary nor proportionate for the provision of the App Store on iPhones and iPads; (ii) are detrimental to users of music streaming services on Apple’s mobile devices who may end up paying more; and (iii) negatively affect the interests of music streaming app developers by limiting effective consumer choice.
In a statement shared with MacRumors, an Apple spokesperson said the company is “pleased” that the Commission has narrowed its case: Apple will continue to work with the European Commission to understand and respond to their concerns, all the while promoting competition and choice for European consumers. We’re pleased that the Commission has narrowed its case and is no longer challenging Apple’s right to collect a commission for digital goods and require the use of the In-App Payment systems users trust. The App Store has helped Spotify become the top music streaming service across Europe and we hope the European Commission will end its pursuit of a complaint that has no merit.