"Today’s Statement of Objections clarifies that the Commission does no longer take a position as to the legality of the IAP obligation for the purposes of this antitrust investigation but rather focuses on the contractual ...
...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 story so far
The crux of the issue is that Spotify has to pay Apple a percentage of any subscriptions that it secures through Apple’s App Store, a fee that Spotify then has to pass on to its ...
...own customers — this effectively means that a Spotify subscription is more expensive when a consumer signs up through an iPhone or iPad than it is through Spotify’s own website.
Moreover, given that Apple offers a competing service — Apple Music — Spotify argued that this puts Apple at an advantage, given that it can offer its own music-streaming service at a cheaper price.
On top of that, Spotify also took issue with the way that Apple prevents developers from informing consumers of alternative payment methods. And it’s this second contention that the EC is now focusing squarely on.
A few weeks back, Spotify and a bunch of co-signatories including rival Deezer published an open letter to the EC’s Commissioner for Competition Margrethe Vestager, essentially asking them to hurry up with their decision.
While today’s announcement could be construed as progress of sorts, it still doesn’t signal anything close to a final decision. It is worth noting that Apple is facing legal challenges elsewhere over its IAP enforcement policy.
In the Netherlands, Apple was hit with hefty fines after failing to comply with an order to allow dating apps to use alternative payment systems, though this was subsequently resolved after Apple offered concessions to allow alternatives.
So today’s news that the EC is no longer concerning itself with in-app payments may come as a surprise to some. In a statement issued to TechCrunch, Spotify’s general counsel Eve Konstan urged the EC to reach a speedy conclusion to this case.
“Today, the European Commission sent a clear message that Apple’s anti-competitive behavior and unfair practices have harmed consumers and disadvantaged developers for far too long,” Konstan said.
“We urge the Commission to reach a swift decision in this case to protect consumers and restore fair competition on the iOS platform.”
If, after that, the Commission sticks to its guns, it can impose a fine of up to 10% of Apple’s global turnover, which was nearly $400 billion last year.
“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,” an Apple spokesperson said in a statement issued to TechCrunch.
“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.”