EU says Apple distorts competition in music streaming

EU regulators on Friday accused Apple of distorting competition in the music streaming market and faced Spotify on a case that could result in a hefty fine and changes in the iPhone maker's lucrative business practices. The preliminary results start a process for Apple and Spotify to respond. If the case is pursued,

EU regulators could ask for concessions and even fine them up to 10% of Apple's global sales or up to $ 27 billion, though they rarely impose the maximum fine. Apple found itself in the crosshairs of the European Commission after Spotify complained two years ago that the US tech giant wrongly limited its rivals to its own music streaming service, Apple Music, on iPhones.

The EU Competition Ombudsman stated in his so-called notice of objection, which sets out the indictment, the problem related to Apple's restrictive rules for its app store, which force developers to use their own in-app payment system and they are attached to it to prevent users from notifying users of other purchase options. "

By setting strict rules for the App Store that penalize competing music streaming services, Apple is depriving users of cheaper music streaming options and distorting competition, ”said Margrethe Vestager, EU Competition Commissioner, in a statement. It does this by charging rivals high commission fees on every transaction on the App Store and by prohibiting them from informing their customers of alternative subscription options, ”she said.

Apple dismissed the EU charges. "Spotify has grown to become the largest music subscription service in the world, and we're proud of the role we've played in it," 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 them. The Commission's argument on behalf of Spotify is the opposite of fair competition, ”she added.

Spotify welcomed the EU's move. "Communicating the objections to the European Commission is a critical step in holding Apple accountable for its anti-competitive behavior and ensuring sensible choice for all consumers and a level playing field for app developers," said the head of global affairs and chief legal Officer Horacio Gutierrez said.

This is the first EU antitrust lawsuit against Apple. Reuters was the first to report on the upcoming EU antitrust fee in March. Spotify is the market leader in music streaming with 356 million active users and 158 million paid subscribers. Apple Music, which was recently launched in 2015, is estimated to have more than 70 million subscribers, though the company doesn't provide a separate number for this part of its business. Competition between the two companies has increased over the past few weeks, and both are looking to grow their customer base by dominating the podcast market.

The EU indictment comes a week before Apple's clash with Epic Games in US antitrust proceedings following a lawsuit by Fortnite creators alleging that Apple abused its dominance in the mobile app market. Epic has complained to the commission on the same issues. Last month, the UK's competition and market regulator opened an investigation into Apple after complaints about the iPhone maker's conditions for app developers were unfair.

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