Apple is to be formally investigated by the European Commission after Spotify accused the company of using the App Store to deliberately disadvantage other app developers.
According to a report by the Financial Times, EU competition commission has decided to launch a formal antitrust investigation into Apple’s conduct “in the next few weeks” after surveying customers, rivals and others in the market.
Spotify in March filed an antitrust complaint against Apple with the EU in which it argued that the iPhone maker enforced App Store rules that “purposely limit choice and stifle innovation at the expense of the user experience.”
Apple swiftly hit back at the accusation, labeling it as “misleading rhetoric” and arguing that “Spotify wants all the benefits of a free app without being free.”
Spotify’s complaint focuses on Apple’s policy of charging a 30 per cent fee on App Store purchases, which means Spotify has to charge existing subscribers $12.99 per month for its Premium plan via the App Store just to collect its standard $9.99 per month charge.
Spotify CEO Daniel Ek claimed that the policy gives Apple an “unfair advantage,” since Spotify is unable to fairly compete with Apple Music‘s standard $9.99 per month price within the App Store.
Alternatively, if Spotify chooses not to collect payments via the App Store, Ek said that Apple “applies a series of technical and experience-limiting restrictions” on the company. Over time, this has also included “locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch.”
The EU can force companies to change business practices they deem unlawful and levy fines of up to 10 per cent of a company’s global turnover. However, investigations by the European Commission can take years to resolve unless the companies involved offer to settle the probes by making legally binding agreements to change their behavior.