The EU has updated its antitrust case against Apple and the control it wields over music streaming services on iOS with potentially good news for complainant Spotify.
The European Commission, the EU body investigating the charges, says Apple breached antitrust laws by stopping rival music firms like Spotify from advertising where and how users could subscribe to their apps. This update to the case does not constitute a final ruling, and it’s now up to Apple to marshal a defense and prove the charges wrong.
Spotify first made a complaint against Apple in 2019, with the European Commission opening an investigation in 2020. The Commission issued an initial “statement of objections” against Apple in 2021, laying out the possible breaches of antitrust law. The Commission focused on two issues: that Apple forced developers to use its own in-app payments system for which it collects a fee (the “IAP obligation”), and that Apple stopped developers from advertising alternative ways to subscribe to their apps (the “anti-steering obligations”).
Today, the Commission has updated this statement of objections. It’s dropped the first charge, saying it “no longer take a position as to the legality of the IAP obligation,” and is focusing on the second. The Commission has also strengthened its language about this charge, declaring a “preliminary view” that “Apple’s anti-steering obligations are unfair trading conditions in breach of Article 102 of the Treaty on the Functioning of the European Union (‘TFEU’).”
For a time, Apple did not allow rival streaming services like Spotify to even include links in the company’s apps to their own subscription sign-ups. (Apple loosened this restriction in March 2022 in order to close an antitrust investigation in Japan.)
If found guilty, Apple could be fined up to $39.4 billion
Apple will now be able to respond to the EU’s charges. If it’s found guilty the company faces a fine of up to 10 percent of its annual global turnover. That would be a fine of up to $39.4 billion dollars based on Apple’s revenue in 2022 of $394.33 billion dollars.
When asked for comment, Apple spokesperson Hannah Smith said: “We’re pleased that the Commission has narrowed its case and is no longer challenging Apple’s right to collect a commission for digital goods and require the use of the In-App Payment systems users trust. The App Store has helped Spotify become the top music streaming service across Europe and we hope the European Commission will end its pursuit of a complaint that has no merit.”
In a statement from Spotify, the company’s general counsel, Eve Konstan, said: “Today, the European Commission sent a clear message that Apple’s anti-competitive behavior and unfair practices have harmed consumers and disadvantaged developers for far too long. We urge the Commission to reach a swift decision in this case to protect consumers and restore fair competition on the iOS platform.”
Last month, Spotify and other European companies urged the Commission to hurry up its investigation and take “swift and decisive action” against Apple. (Though in its own announcement today, the Commission notes “there is no legal deadline for bringing an antitrust investigation to an end.”) If delayed much further, the case is also likely to run into a whole new set of obligations Apple and others will have to abide by under the EU’s coming Digital Markets Act, or DMA. These will force Apple to allow third-party app stores and app sideloading on iOS for the first time.
Update, March 2nd, 04:04AM ET: Updated with statement from Apple.