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EU accuses Apple of abuse of dominance in online music

BRUSSELS (Reuters) – The European Commission on Friday accused Apple of abusing a dominant position in the online music market, following a complaint filed by Spotify, which could lead to a fine against the giant American and a modification of its practices.

In a statement, the European executive criticizes the American group for not allowing developers to inform users that they have other means of purchasing their services outside of the App Store application store.

Swedish online music broadcaster Spotify filed a complaint against Apple in 2019 over the 30% commissions Apple claimed for apps and services sold on the App Store.

“The Commission is concerned that Apple is imposing certain restrictions on application developers, preventing them from informing iPhone and iPad users of the existence of cheaper alternative purchasing solutions,” says she in a statement.

The European Commission’s argument following Spotify’s complaint runs counter to the principles of fair competition, Apple said.

“Spotify has grown into the world’s largest music subscription service and we’re proud of the role we’ve played in that regard,” Apple said in a statement.

“Once again, they want all the benefits of the App Store but don’t think they have to pay anything for it,” the US group added.

Spotify for its part considered that the statement of the European Commission was an important step in order for Apple to respond to its practices deemed anti-competitive.

The Swedish group added that there is an urgent need to ensure that the iOS platform functions fairly as the implications are wide.

HIGHER PRICES FOR CONSUMERS

Spotify’s basic music service subscription is billed in Europe from 9.99 euros per month, the same price as competing service Apple Music, but the Swedish music giant must pay Apple 30% in commissions. first year and 15% the following years when the subscription is taken out via its in-app purchase system.

“By establishing strict rules on the App Store that put competing music streaming services at a disadvantage, Apple deprives users of cheaper music streaming choices and distorts competition,” said EU Competition Commissioner Margrethe Vestager. in the press release.

“This is done by charging competitors high commission fees on every transaction in the App Store and forbidding them to notify their customers of cheaper alternative subscriptions,” she added.

The European Commission’s investigation showed that most service providers ultimately charge these commission fees to end users so as not to cut their margins, she said in her statement.

The Commission further notes that Apple has a dominant position in the market for the distribution of music applications via the App Store, the only way to install software on the iPhone and iPad.

The preliminary opinion of the Commission, which has sent a statement of objections to the US group, is that Apple is distorting the online music market by raising the costs of music app developers, resulting in higher prices. high for consumers, concludes the EU executive.

This is the EU’s first competition charge against Apple, which faces a fine of up to 10% of its global revenue.

However, this procedure does not predict the final result of the in-depth investigation opened on June 16, 2020 by the European Commission on the rules of the App Store, recalls the European executive.

Apple will be able to respond to the EU’s accusations before it makes its final decision. The American group can offer concessions to avoid a possible fine.

(Claude Chendjou in Paris, with Keith Weir in London, Foo Yun Chee in Brussels and Supantha Murkherjee in Stockholm, edited by Bertrand Boucey)

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