Apple Under European Commission Investigation Following Spotify Complaint
The European Commission announced that it will be moving forward with its investigation into Apple's practices following a formal complaint filed by music streaming firm Spotify. The commission decided to take action less than a month after the complaint was filed, potentially threatening one of Apple's biggest markets.
Last month, Spotify brought Apple's practices in the limelight following a slew of online posts by CEO Daniel Ek. The executive, along with the advocacy website Time to Play Fair, explained how Apple has been setting up its own music streaming service to completely dominate its competitors through unfair means.
Apple allegedly used payment blockades and other technical barriers to give its own service an unfair advantage over competitors. This was apparently made obvious by Apple's unwillingness to apply those same hurdles to its own service.
Apple currently imposes a "tax" on its competitors who want to be listed on its Apple App Store. The 30 percent fee is apparently forcing competitors to increase their prices, well above what Apple is charging its users for Apple Music. Additionally, Apple currently does not charge the same "Apple tax" to its slew of other mobile applications.
Spotify is currently the largest music streaming service in the world, with over 200 million users. On the other hand, Apple Music is gaining popularity, albeit mostly with its own iOS users. Apple's music service recently overtook Spotify in terms of paying subscribers in the United States.
Spotify's antitrust complaint against Apple is being taken seriously by the European Commission as evident in its immediate action. Apple had sent its retort against Spotify's complaint, but its counter-argument has been seen as completely unconvincing.
The European Commission's investigation into the matter will take quite a long time as these types of probe usually do. The EU's probe into Microsoft's bundling practices in 2009 took around four years before fines and decisions were announced. This is expected to be more of the same for the commission's current probe into Apple.
However, a formal investigation may still cut into Apple's profits in Europe as its unfair practices become more public. The probe could also undermine one of the firm's largest sources of income as Apple does earn a good chunk of its profits from its mobile applications store.
Apart from the European Union, Apple is also facing a potential antitrust probe in its home turf. The US Supreme Court is currently continuing its deliberation on the Apple vs. Pepper case, where Apple is accused of pretty much the same antitrust issues over its monopolizing practices within its App Store.