Apple to Face EU Charges Over Spotify Complaint

Apple are potentially facing an EU antitrust charge sheet in the foreseeable future after a complaint by rival Spotify that the technology firm unfairly pushed its own music streaming service, two sources told Reuters.

The European Commission is considering sending the statement of objections setting out suspected violations of the bloc’s antitrust rules to Apple before the start of summer, one source said.

The EU competition enforcer opened four cases against Apple in June of last year. The EU charge sheets normally consist of whether a fine is merited and what companies must do in order to halve anti-competitive practices.

The Commission has as yet failed to comment on the matter.

Apple instead chose to refer simply to its March 2019 blog, which claimed its App Store helped Spotify to benefit from hundreds of millions of app downloads in order to become Europe’s largest music streaming service.

In its 2019 complaint to the Commission, Spotify claimed Apple unfairly restricts rivals to its own streaming service app Apple Music. Spotify also protested against the 30% fee app developers are charged to use Apple’s in-app purchase system (IAP).

As well as the Spotify complaint, the European Commission is also currently investigating Apple’s App Stores rules for all competing apps, e-books and audio books, as well as its terms and conditions for the mobile payment service Apple Pay.

The UK competition watchdog also opened an investigation into Apple’s practices, while in the Netherlands a similar agency is close to a decision in its own investigation into Apple.

The watchdog’s chief executive Andrea Coscelli said: “Millions of us use apps every day to check the weather, play a game or order a takeaway.

“So, complaints that Apple is using its market position to set terms which are unfair or may restrict competition and choice – potentially causing customers to lose out when buying and using apps – warrant careful scrutiny.”

The UK regulator will work to ascertain whether or not Apple has a “dominant position” in the business of distributing apps on its devices in the UK.

If the regulator determines this is indeed the case, it will investigate whether the company imposes unfair or anti-competitive terms on developers using the App Store ‘ultimately resulting in users having less choice or paying higher prices for apps and add-ons’.

Apple said this week that it was prepared to work with the regulator.

“The App Store has been an engine of success for app developers, in part because of the rigorous standards we have in place – applied fairly and equally to all developers – to protect customers from malware and to prevent rampant data collection without their consent,” the company said.

In more positive business news, President Biden became the toast of the Scottish whisky industry this week as the US and UK came to an agreement to suspend damaging tariffs imposed by the Trump administration for four months at least.

The 25% tariff was part of a range of European products targeted by Trump as part of an infamous row over government subsidies provided to European aerospace firm Airbus and to US plane manufacturer Boeing.

Last month, officials in the Scotch whisky sector claimed the single malt penalty, the result of a dispute not of its making, had accounted for almost $700 million in export losses.

The suspension of the tariffs, which also cover more UK-made products such as cheese, allows for both sides to now reach a sustainable agreement following the UK’s decision at the end of the Brexit transition period to lift retaliatory tariffs imposed by the EU on some US goods.

A joint statement said: “The United Kingdom and the United States are undertaking a four-month tariff suspension to ease the burden on industry and take a bold, joint step towards resolving the longest running disputes at the World Trade Organization.

“This will allow time to focus on negotiating a balanced settlement to the disputes and begin seriously addressing the challenges posed by new entrants to the civil aviation market from non-market economies, such as China.”

The Scotch Whisky Association’s chief executive, Karen Betts, responded: “The tariff on single malt Scotch whisky exports to the US has been doing real damage to Scotch whisky in the 16 months it has been in place, with exports to the US falling by 35%.”

Diageo – home to the Johnnie Walker brands – also welcomed the development.

Its chief executive, Ivan Menezes, said: “Today is a very good day for Scotch and Scotland.

“We recognize the government’s tireless efforts, using the UK’s newly independent trade policy, to deliver the suspension and hopefully in time, a permanent end to these punitive tariffs.”

He added: “Final resolution of the aerospace dispute, combined with the announcement of a continued freeze on spirits duty in yesterday’s budget, will safeguard thousands of jobs across Scotland and the UK.”