June 17 (UPI) — The European Commission said it is investigating U.S. tech giant Apple over worries its Apple Pay and iOS App Store services stifle competition.
The European Commission announced the two antitrust investigations separately on Tuesday after mounting criticism from Apple’s competitors, such as Spotify.
Concerning the iOS App Store investigation, the commission said it has concerns over Apple’s rule mandating app developers to use its in-app purchase system for when users make purchases at a cost of 30 percent commission. The other issue is the restriction barring developers from informing users through the app of often cheaper ways to buy their products and services.
“Apple sets the rules for the distribution of apps to users of iPhones and iPads,” said Margrethe Vestager, executive vice-president in charge of competition policy at the European Commission. “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. We need to ensure that Apple’s rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service, Apple Music, or with Apple Books.”
The investigation follows Spotify, a competitor of Appel Music, filing a complaint in March of last year against the two rules, and a preliminary investigation raised concerns that Apple’s restrictions “may distort competition for music streaming services on Apple’s devices,” the commission said.
These issues have forced Apple’s competitors to either disable the in-app subscription possibility or to raise their prices in the app, passing on Apple’s fee to their consumers, it said.
Earlier this year, an unnamed e-book and audiobook distributor also filed a complaint with the commission against Apple citing similar concerns as Spotify.
The second investigation concerns Apple’s proprietary mobile payment application on Apple devices and whether its terms limit competition.
The commission said it will look into the issue that Apple Pay is the only payment option that may use the so-called tap-and-go technology on iPhone and iPads as well as complaints from rival services that say they are restricted from selling specific products through Apple Pay.
Vestager said amid the coronavirus pandemic, more people are turning to mobile payment solutions for both in-person and online purchases, but Apple appears to set the conditions on how merchants can use this service in both methods.
“It is important that Apple’s measures do not deny consumers the benefits of new payment technologies, including better choice, quality, innovation and competitive prices,” Vestager said.
Apple responded that it follows the law and chastised the EU for “advancing baseless complaints from a handful of companies who simply want a free ride and don’t want to play by the same rules as everyone else.”
“We want to maintain a level playing field where anyone with determination and a great idea can succeed,” Apple said in a statement. “At the end of the day, our goal is simple: for our customers to have access to the best app or service of their choice, in a safe and secure environment. We welcome the opportunity to show the European Commission all we’ve done to make that goal a reality.”
