The European Commission has launched the first round of antitrust proceedings against Apple over a Spotify complaint filed back in 2019, bringing charges against the Cupertinians over App Store policies.
The commission says Apple's app store has abused its dominant position in the market for music streaming apps.
The European agency's charges focus on two App Store rules: the need to use an embedded payment system with an accompanying 30 percent fee to Apple, and a ban on informing users about alternative purchase options outside the app.
According to the European Commission, these rules have led to higher end prices for consumers, as most developers have shifted these costs to users.
Since this is only the first round of antitrust litigation, Apple will be able to respond to each allegation and try to convince the panel that its practices are not anticompetitive. However, if the company does not succeed, then it will face a turnover fine of up to 10% of annual revenue. With Apple's revenue at $274.5 billion last year, the fine could amount to about $27 billion. At the same time, Apple will be obliged to change its business model, which could lead to more significant losses for the company than a multibillion-dollar fine from the EU.
Spotify reacted positively to the start of antitrust proceedings:
“The European Commission’s statement of objections is a critical step toward holding Apple accountable for its anticompetitive behavior, ensuring meaningful choice for all consumers and a level playing field for app developers,” the company’s chief legal officer, Horatio Gutierrez, said in a statement.
Apple also commented on the start of the proceedings, denying allegations of anticompetitive behavior:
“Spotify has become the largest music subscription service in the world, and we’re proud for the role we played in that. Spotify does not pay Apple any commission on over 99% of their subscribers, and only pays a 15% commission on those remaining subscribers that they acquired through the App Store.”
Cupertinians added that Spotify wants to get all the benefits of the App Store, but does not suggest that you have to pay anything for it. Therefore, the company considers the accusations of the European Commission on behalf of Spotify to be the opposite of fair competition.