European Union accuses Apple of violating antitrust laws through App Store rules

European Union regulators are accusing Apple of violating the bloc’s antitrust laws, alleging that the company distorts competition for music streaming through rules for its App Store.

Spotify had objected to Apple’s rules.

The EU’s executive Commission said Friday it objected to how Apple applies rules in its App Store to music streaming services competing with its own Apple Music service, saying that it ends up costing consumers more and limiting their choice.

Cary-based Epic Games also has filed a complaint against Apple and its App Store rules in the EU. It also has filed an antitrust suit against Apple in the US, and a trial is set to begin May 3 at a federal court in California. Epic also is challenging Apple in the U.K. and Australia.

Epic’s fight centers around its globally popular Fortnite game and Apple’s charging of 30% sales fees through app store purchases. Epic created a workaround for the fees and Apple responded by banning Fortnite.

One of the main concerns outlined by the EU centers on Apple’s practice of forcing app developers selling digital content to use its in-house payment system, which charges a 30% commission on all subscriptions.

The EU’s investigation, which followed up on a complaint from the popular music-streaming service Spotify, found that fees end up being passed on to consumers.

A second concern is that that Apple prevents developers from telling users about cheaper payment methods.

“Our preliminary finding is that Apple is a gatekeeper to users of iPhones and iPads via the App Store,” the EU’s competition commissioner, Margrethe Vestager, said in press release. “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.”

Apple didn’t respond immediately to a request for comment.

Under EU competition law, companies can be fined a percentage of their annual revenue for breaches, which in Apple’s case could run into billions of euros.

Earlier this week, Apple CEO Tim Cook expressed confidence entering the Epic trial.

“The App Store has been an economic miracle. Last year, the estimates are that there was over a half a trillion dollars of economic activity because of the store. And, so, this has been just an economic gamechanger for not only the United States, but several countries around the world. And, we’re going to go in and tell our story. And we’ll see where it goes. But, we’re confident,” Cook told CNBC in an interview Wednesday after Apple posted another strong financial report.

Apple CEO ‘confident’ entering anti-trust showdown with Epic Games



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