Commission Claims Apple’s 30% Cut Violates Competition Law

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Spotify is providing something; something that Apple wants to take a 30 percent cut in the music streaming market, although there are cheaper options. Since Apple alone can’t distribute music streaming, EU Commission said it should allow other music streaming providers to do so with equal fairness.

European Commission charged Apple with violating antitrust law. The commission alleges that Apple “distorted competition in music streaming market, abusing its dominant position for the distribution of music streaming apps through its App Store.”

The problem at this time only lives inside the EU zone. However, the outcome could also lead other areas of the world to take similar action on Apple.

Reuters reports that if the case is pursued, the EU could demand concessions and potentially impose a fine of up to 10 percent of Apple global earning, which could amount to $27 billion.

The commission said it has a problem with the mandatory use of Apple’s own in-app purchase mechanism imposed on music streaming app developers to distribute their apps via Apple’s App Store. Another problem is Apple’s imposing of restrictions on app developers, preventing them from informing iPhone and iPad users of alternative, cheaper purchasing possibilities.

Spotify, Apple Music, Podcasts And Other Phone Apps On Iphone Screen
Spotify, Apple Music, Podcasts And Other Phone Apps On Iphone Screen

The commission has given Apple 12 weeks to formally respond. However, the case could last in court for several years. Apple has published statements that it will fight the allegations.

The company commended Spotify for being the largest music subscription service worldwide and said it is proud of the role it played in making that happen since Spotify made use of the App Store.

Even though Apple stands firm on its rule that music apps on iOS can’t tell customers about alternative methods of purchasing subscriptions, Spotify disagrees, saying that it should be able to advertise alternative deals on their iOS app, but Apple said no store in the world would allow that.

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