The tech giant’s App Store does have excessive power in the marketplace.
And it begins. Apple Inc. now officially faces a double threat on the regulatory front. On Tuesday, the European Union announced it has opened two formal antitrust investigations into the tech giant to see if the company has broken competition laws with its App Store and Apple Pay services. Specifically, the regulators plan to investigate Apple’s rules surrounding its in-app purchase system, where its charge developers a 30% cut for digital content or services sold on its platform (the 30% fee is lowered to 15% after the first year for subscriptions), along with the company’s restrictions on developers from informing users of alternative purchasing avenues inside their iOS apps. The EU will also look into how Apple Pay is the only payment solution allowed to use Apple mobile devices’ “tap and go” payment functionality inside physical stores. Of the two, the potential regulation of the App Store is the bigger deal. For years, the digital store’s excessive fee structure has been a main point of contention for app developers. Epic Games Inc. CEO Tim Sweeney has repeatedly said the commission rate was too high given the actual middle-man services Apple provides.
