Antitrust: Commission sends Statement of Objections to Apple on App Store rules for music streaming providers

(Credit: Unsplash)

This article is brought to you in association with the European Commission.


The European Commission has informed Apple of its preliminary view that it distorted competition in the music streaming market as it abused its dominant position for the distribution of music streaming apps through its App Store. The Commission takes issue 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. The Commission is also concerned that Apple applies certain restrictions on app developers preventing them from informing iPhone and iPad users of alternative, cheaper purchasing possibilities.  

The Statement of Objections concerns the application of these rules to all music streaming apps, which compete with Apple’s music streaming app “Apple Music” in the European Economic Area (EEA). It follows-up on a complaint by Spotify.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “App stores play a central role in today’s digital economy. We can now do our shopping, access news, music or movies via apps instead of visiting websites. Our preliminary finding is that Apple is a gatekeeper to users of iPhones and iPads via the App Store. With Apple Music, Apple also competes with music streaming providers. By setting strict rules on the App store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition. This is done by charging high commission fees on each transaction in the App store for rivals and by forbidding them from informing their customers of alternative subscription options.”

Statement of Objections on Apple’s rules for distribution of music streaming apps

The Commission preliminary finds that Apple has a dominant position in the market for the distribution of music streaming apps through its App Store. For app developers, the App Store is the sole gateway to consumers using Apple’s smart mobile devices running on Apple’s smart mobile operating system iOS. Apple’s devices and software form a “closed ecosystem” in which Apple controls every aspect of the user experience for iPhones and iPads.

Apple’s App Store is part of this ecosystem and the only app store that iPhone and iPad users can use to download apps for their mobile devices. The Commission found that users of Apple’s devices are very loyal to the brand and they do not switch easily. As a consequence, in order to serve iOS users, app developers have to distribute their apps via the App Store, subject to Apple’s mandatory and non-negotiable rules.

The Commission’s concerns, as outlined in the Statement of Objections, relate to the combination of the following two rules that Apple imposes in its agreements with music streaming app developers:

  • The mandatory use of Apple’s proprietary in-app purchase system (“IAP”) for the distribution of paid digital content. Apple charges app developers a 30% commission fee on all subscriptions bought through the mandatory IAP. The Commission’s investigation showed that most streaming providers passed this fee on to end users by raising prices.
  • “Anti-steering provisions” which limit the ability of app developers to inform users of alternative purchasing possibilities outside of apps. While Apple allows users to use music subscriptions purchased elsewhere, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper. The Commission is concerned that users of Apple devices pay significantly higher prices for their music subscription services or they are prevented from buying certain subscriptions directly in their apps.

The Commission’s preliminary view is that Apple’s rules distort competition in the market for music streaming services by raising the costs of competing music streaming app developers. This in turn leads to higher prices for consumers for their in-app music subscriptions on iOS devices. In addition, Apple becomes the intermediary for all IAP transactions and takes over the billing relationship, as well as related communications for competitors.

If confirmed, this conduct would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.

The sending of a Statement of Objections does not prejudge the outcome of an investigation.

Background and procedure

Article 102 of the TFEU prohibits the abuse of a dominant position. The implementation of these provisions is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.

The Commission opened the in-depth investigation into Apple’s App Store rules on 16 June 2020

A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The addressees can examine the documents in the Commission’s investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. Sending a Statement of Objections and opening of a formal antitrust investigation does not prejudge the outcome of the investigations.

There is no legal deadlines for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.

More information on the investigation is available on the Commission’s competition website, in the public case register under case number AT.40437. A periodic compilation of antitrust and cartel news is available in the Competition Weekly e-News.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

UN chief welcomes South Sudan’s Unity government, lauds parties for ‘significant achievement’

With lifelong learning, you too can join the digital workplace

Legendary Harlem Globetrotters slam-dunk at the UN, with message that brings families, nations together

German stock market is not affected by the Greek debt revolution while Athens is running out of time

A Europe that delivers: EU citizens expect more EU level action in future

Ukraine: Temperatures plunge amid rising humanitarian needs

How to talk about climate change: 5 tips from the front lines

This Canadian start-up turns millions of chopsticks into sustainable furniture

OECD Secretary-General Gurría welcomes announcement of new trade agreement between the US, Mexico and Canada

How tech is helping the agriculture sector curb carbon emissions

2019 data on official development aid & online discussion of ODA’s role in the Covid-19 crisis

Spanish vote – bad luck for Greece: Does Iphigenia need to be sacrificed for favourable winds to blow in Eurozone?

How three US cities are using data to end homelessness

MEPs want to ensure sufficient funding for Connecting Europe’s future

Post-Brexit muddled times: the resignation of UK’s top ambassador and Theresa May’s vague plans

Re-open EU: Commission launches a website to safely resume travelling and tourism in the EU

How to make primary healthcare a favourable career choice for medical students: strategies and reflections

Eastern Partnership: Commission proposes new policy objectives for beyond 2020

What if big-tech companies became non-profits?

South Sudan: UN rights experts see little headway on peace deal amid spike in local-level violence

UN official sees ‘unprecedented opportunities’ to make progress on peace in Afghanistan

Commission supports reform projects in Member States for more jobs and sustainable growth

Polish de facto ban on abortion puts women’s lives at risk, says Parliament

Mobile health technology: Advances, Facilitations and Promotion of Autonomy

Road injuries leading cause of death for the young, despite safety gains: UN report

State aid: Commission approves up to €4 billion French measure to recapitalise Air France

Iran: UN rights chief ‘deeply disturbed’ by continuing executions of juvenile offenders

This afternoon Britain will be once more isolated from mainland Europe

MEPs want ambitious funding for cross-border projects to connect people

EU’s guidelines on net neutrality see the light although grey areas do remain

Why South Africa is on a path of economic renewal

Built by a woman: supporting the dreams of mum entrepreneurs

Texting is a daily source of stress for 1/3 of people – are you one of them?

Pandemic versus fear

A breath of fresh air: How three disused industrial areas became beautiful parks

Will the French let Macron destroy their party political system?

Pro-EU forces won a 70% triumph in the European elections

Norway has successfully enforced its foreign bribery laws but faces potential obstacles

EU is not only obsessed with Facebook but also blaims now innocent websites using social plugins to serve democratic dialogues?

Right-wing “sovranism” harm national identity

EU revengefully shows no mercy to Cameron by demanding a fast and sloppy Brexit now

What wealth managers can learn from family dynamics

How global food safety protects the planet and begins on the farm

OECD: Mind the financial gap that lies ahead

Why collaboration will be key to creating the workforce of the future

Green Deal: How MEPs wish to channel EU investment to sustainable activities

VW emissions scandal: While U.S. car owners are vindicated, Europe still unable to change its laws and protect its consumers

If on a summer’s night: is UK businesses’ “new deal” the only key to the “best of all worlds”?

The needs, challenges and power dynamics of refugee resettlement

A jingoistic Spanish ‘war’ from the past

Euro celebrates its 20th birthday

Students & Allies Unite Globally To Launch #Students_Against_COVID

This team of Saudi women designed an award-winning app to make the Hajj safer

Here’s how we get businesses to harmonize on climate change

Forty-two countries adopt new OECD Principles on Artificial Intelligence

No more lead in PVC to protect public health, say MEPs

‘Multiplicity’ of rights violations in Ukraine as fifth winter of conflict bites

5G: How a ‘legion of robots’ could help save the rhino

It’s Trump’s anti-globalization and inward-looking rhetoric that perturbs GOP and US

‘No shortcuts to a healthier world’: WHO chief sets out health priorities for the decade

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s