EU takes aim at Apple in landmark antitrust cases
The EU’s powerful competition authority opened a series of cases against Apple yesterday in a sign that Brussels isn’t backing down in its efforts to rein in US-based tech giants.
The cases put Apple back in the EU’s crosshairs four years after Brussels ordered the California-based giant to repay 13 billion euros (US$14.7 billion) in back taxes based on antitrust concerns.
The claims — which Apple angrily rejects — land as Brussels is preparing historic changes to EU law that would beef up Europe’s ability to limit the size and power of so-called digital “gatekeepers,” including Amazon, Google and Facebook.
In the EU’s first case, the European Commission followed a complaint brought by Sweden-based Spotify and others accusing Apple of making unfair use of its app store to promote its own Apple Music.
The commission also launched an in-depth investigation into Apple Pay based on concerns the fast-growing and easy-to-use payment system is shutting out rivals.
Spotify filed a formal complaint in 2019 taking issue with restrictions by Apple on apps that don’t use its payment system on its App Store.
Apple takes a 30 percent cut from businesses using its store, which Spotify says amounts to a violation of fair-competition rules.
“It appears that Apple obtained a ‘gatekeeper’ role when it comes to the distribution of apps and content to users of Apple’s popular devices,” said EU Executive Vice President Margrethe Vestager. “We need to ensure that Apple’s rules do not distort competition in markets where Apple is competing with other app developers — for example, with its music-streaming service, Apple Music, or with Apple Books.”
The European Union’s in-depth investigations don’t necessarily mean a fault has been found, and there is no deadline for the commission to complete its case.
But the commission said it would pursue the case “as a matter of priority” in response to complaints the EU moves too slowly in clamping down on the fast-changing tech business.
“Apple’s anti-competitive behavior has intentionally disadvantaged competitors, created an unlevel playing field, and deprived consumers of meaningful choice for far too long,” Spotify said in a statement. “We welcome the European Commission’s decision to formally investigate Apple and hope they’ll act with urgency to ensure fair competition on the iOS platform for all participants in the digital economy.”
Vestager also opened a full-scale probe into Apple Pay where authorities are worried the company could take a commanding lead in a booming business.
Launched in 2014, Apple Pay allows those with iPhones to make payments at retailers by using their devices at the same terminals currently used for credit and debit cards.
But any company wanting to use the technology on an iPhone — whether a bank or the London metro system — must pass through Apple Pay for a fee.
Apple rejected the legality of the cases and lashed out at its rivals. “It’s disappointing the European Commission is advancing baseless complaints from a handful of companies that simply want a free ride and don’t want to play by the same rules as everyone else,” an Apple official said. “We don’t think that’s right — we want to maintain a level playing field for everyone.”