EU hits Apple with music streaming charge in boost for Spotify
On Friday, EU authorities on the industry of online music accused Apple (AAPL. O), siding with Spotify (SPOT.N), of distorting rivalry in a situation that may contribute to heavy fines and improvements to profitable commercial practises of the iPhone manufacturer.
First time in Brussels, anti-competitive charges have been levelled against Apple, the preliminary findings are while two sides have had crashing battles in the past, particularly in Ireland’s multimillion dollar tax dispute.
It will now answer Apple and Spotify, as well as others. The EU could, if the argument were taken, claim concessions and levy a penalty of up to 10 percent of Apple’s world sales – amounting to 27 billion dollars, but the full penalty is seldom levied.
Since Sweden Apple was at the crosshairs of the European Commission Spotify protested against the U.S. software giant’s disproportionate limitation by competitors of Apple Music on iPhones’ own music Listening site two years earlier.
Apple’s stringent policies on its App Store have been addressed by the EU antitrust enforcer, in his so-called objections speech, who claimed that developers are obliged to use their own on-the-spot payment scheme, and to prohibit them from reminding consumers about additional opportunities to buy.
European Commissioner for Competition Margrethe Vestager said there are strong indicators that Apple’s App Store regulations hinder the growth of music streaming competitors and affect app developers more generally.
“You (app developers) depend on Apple App Store for gateways to iPhone and iPad users of Apple. Such considerable market strength cannot be ignored because the entry requirements to the Apple App Store are crucial to the performance of app developers, “A news conference, she said.
Vestager said Apple should stop restrictive activities and withdraw from any replication.
She also claimed that other officials were investigating the matter.
She said, adding she was still involved in the smartphone gaming industry, even though it was an early day. “We’ve got contacts with other jurisdictions in related situations that might be the Netherlands, Australians, Americans.
The EU charge was rejected by Apple.
“We are proud of the part we played in this, and Spotify is the biggest music streaming services on earth.”
“You want all the App Store perks, just don’t believe you can pay something. On behalf of Spotify, the claim of the Commission is contrary to reasonable competition, “This continued. It added.
Spotify supported the EU change, calling it a “critical step in ensuring that Apple is responsible for its anti-competitive behaviour and ensures that all users have a meaningful option, and equal play fields for product developers.”
First, in March Reuters reported on the forthcoming EU antitrust fee.
Spotify, a leading music streaming provider with 356 million active users and 158 million paying customers, is one of the few major success stories of consumers in Europe.
Apple Music is reported to have more than 70 million customers released more recently in 2015, but there is no separate statistic for Apple Music for that portion of the business.
In the recent weeks, competition among the two firms has increased, each aiming to establish their consumer base by dominance on the podcasts industry.
The European consumer organisation BEUC says that ‘European users demand and warrant access to a wide spectrum of music listening platforms without their options being constrained or costs artificially boosted by Internet gatekeepers.’.
A week before Apple face Epic Games in a U.S. antitrust litigation after a “Fortnite” law suit, the EU charge alleges that the domination of Apple in the smartphone app industry is being violated.
In the same respect, Epic pleaded with the Commission.
The UK Competition and Markets Authority launched an enquiry into Apple last month, following concerns over unequal terms and conditions of the iPhone manufacturer for Software developers.