EU Finalizes Antitrust Charges Against Apple, Announcement Likely Coming This Week
Apple has long been accused of being anti-competitive, but these accusations may soon be further placed under a microscope. The European Union (EU) is expected to charge Apple over supposed antitrust practices sometime over the next week. The case will likely be based off of the allegations of companies such as Spotify.
Spotify argued in 2019 that Apple’s app store policies “[tilted] the playing field to disadvantage competitors.” These practices have included frequently changing app store policies and initially demanding a 30 percent royalty for using Apple’s payment system for subscriptions. Spotify claims that Apple’s practices have forced it to artificially inflate prices, which is detrimental to its business and to customers. Spotify filed an official complaint with the EU in March 2019
Apple responded in June 2019 to these allegations by claiming that Spotify was being dishonest. It argued that Spotify had used Apple’s payment service for a limited time and that Spotify had only paid the 15 percent “app tax” for 680,000 premium tier customers or about 0.5 percent of their customers at the time. Apple noted that Spotify eventually moved away from using Apple’s payment service entirely. Apple also contended that Spotify wanted to “keep all the benefits of the App Store ecosystem… without making any contributions to that marketplace.”
Apple is currently engaged in a lawsuit with Epic Games for similar reasons. Epic Games insists that Apple’s practices are monopolistic and especially harmful to smaller developers. Epic Games is particularly critical of Apple’s 30 percent royalty fee and Apple’s resistance to in-app purchasing methods that do not use their payment system. Epic Games has received support from others that are frustrated with Apple such as Facebook and Spotify. Apple maintains that Epic Game’s lawsuit is “self-serving” and not nearly as altruistic as Epic Games claims it is. The first court date is May 3rd, 2021.
There have been some recent changes to the Apple App Store to partly address these complaints. Developers who earned less than $1 million last year can now qualify for a 15 percent royalty rate instead of a 30 percent royalty rate. Major developers like Epic Games, who make well over $1 million a year, are excluded.
This case is one of four cases that were opened up against Apple in June 2020. It is important to note that this particular case is not public yet and there is no updated information about the three additional cases at this moment. Neither Apple nor the EU have offered any comment, but there will hopefully be more information soon.
Top image courtesy of Apple.
Spotify argued in 2019 that Apple’s app store policies “[tilted] the playing field to disadvantage competitors.” These practices have included frequently changing app store policies and initially demanding a 30 percent royalty for using Apple’s payment system for subscriptions. Spotify claims that Apple’s practices have forced it to artificially inflate prices, which is detrimental to its business and to customers. Spotify filed an official complaint with the EU in March 2019
Apple responded in June 2019 to these allegations by claiming that Spotify was being dishonest. It argued that Spotify had used Apple’s payment service for a limited time and that Spotify had only paid the 15 percent “app tax” for 680,000 premium tier customers or about 0.5 percent of their customers at the time. Apple noted that Spotify eventually moved away from using Apple’s payment service entirely. Apple also contended that Spotify wanted to “keep all the benefits of the App Store ecosystem… without making any contributions to that marketplace.”
Apple is currently engaged in a lawsuit with Epic Games for similar reasons. Epic Games insists that Apple’s practices are monopolistic and especially harmful to smaller developers. Epic Games is particularly critical of Apple’s 30 percent royalty fee and Apple’s resistance to in-app purchasing methods that do not use their payment system. Epic Games has received support from others that are frustrated with Apple such as Facebook and Spotify. Apple maintains that Epic Game’s lawsuit is “self-serving” and not nearly as altruistic as Epic Games claims it is. The first court date is May 3rd, 2021.
There have been some recent changes to the Apple App Store to partly address these complaints. Developers who earned less than $1 million last year can now qualify for a 15 percent royalty rate instead of a 30 percent royalty rate. Major developers like Epic Games, who make well over $1 million a year, are excluded.
This case is one of four cases that were opened up against Apple in June 2020. It is important to note that this particular case is not public yet and there is no updated information about the three additional cases at this moment. Neither Apple nor the EU have offered any comment, but there will hopefully be more information soon.
Top image courtesy of Apple.
