By forcing app developers to use its payment system and comply with other rules, regulators said Apple broke European Union competition laws.
European Union regulators on Friday accused Apple of violating antitrust laws by imposing unfair rules and fees on rival music-streaming services that depend on the App Store to reach customers. Amid growing scrutiny of the tech industry worldwide, the case will be an important test of a government’s ability to force one of Silicon Valley’s most powerful companies to change its behavior. Europe is seen as a global bellwether on tech policy, but Apple has vowed to fight the charges. With its ability to make or break the business of app developers, Apple is one of the digital economy’s most important gatekeepers. Any app downloaded to an iPhone or iPad — from Tinder to Instagram to Candy Crush — must comply with the company’s rules and guidelines, including using Apple’s payment system and sharing up to 30 percent on any sales. If not, a company risks losing access to millions of Apple customers. Apple says tight oversight of the App Store ensures customers download high-quality apps, protecting users from viruses, fraud and buggy software. But companies including Spotify, the music streaming service that filed a complaint two years ago that set off the European Union’s investigation, have grown frustrated with its powerful position. They argue it allows Apple to undercut competitors to services like Apple Music and charge an unfair tax on developers. The European Commission, the executive arm of the 27-nation bloc, agreed with Apple’s opponents. Authorities zeroed in on requirements that rival music platforms must use Apple’s payment system, forcing them to give Apple a percentage of their subscription fees. The rules have the effect of driving up prices, regulators said, because companies are prevented from offering cheaper payment options and pass on Apple’s fees to customers. Margrethe Vestager, the commission’s executive vice president in charge of antitrust enforcement, said Apple was abusing its power to harm Spotify, the Swedish company that is Apple’s main competitor in the music streaming and podcast market. “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,” Ms. Vestager said in a statement. Ms. Vestager said the findings were preliminary and there was no fixed deadline for regulators to impose a penalty or reach a settlement. Earlier antitrust cases against Google took years to resolve. In the Apple case, remedies could include letting app developers use alternative payment methods.
