European Commission launches two investigations into Apple

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The European Commission launches two investigations into Apple. The first investigation focuses on the question if Apple is abusing its power through the App Store, and the second investigation focuses on Apple Pay.

The Commission is going to look at in-app purchases in particular. If applications want to offer purchases within their app, they must pay Apple 30 percent commission as part of this payment. This also applies to monthly subscriptions, where 30 percent of the monthly amount goes to Apple. To avoid this, some services have more expensive subscriptions, so users do not have to buy products or services within the app. These applications are also prohibited from advertising cheaper ways to access the service, for example, through the website.

Spotify already accused Apple of unfair competition last year. Spotify claims that Apple is using the App Store to suppress innovation and limit consumer choice in order to promote its own services, and in this case, Apple Music. According to the European Commission, this would mean that Apple is violating Europe’s antitrust rules.

“It seems that Apple has been given a gatekeeper role when it comes to the distribution of apps and content,” European Commissioner Margrethe Vestager says. “We need to make sure Apple’s rules don’t interfere with competition in the marketplace where Apple itself competes with other app developers”.

Apple Pay

The second investigation focuses on Apple Pay. It concerns the terms and conditions that Apple imposes on companies before they are allowed to use the payment service in their online stores. The European Commission has strong suspicions that Apple is violating European rules in this case as well. “It seems that Apple sets the rules for how vendors can use Apple Pay in their apps and on their websites,” says Vestager.

The investigation also takes a look at the ‘tap and go’ functionality of the nfc chip in iPhones. According to Vestager, Apple restricts this feature to its own services. These policies should not prevent customers from integrating new payment techniques.

If Apple is found guilty of violating European rules, the company must pay a fine of up to 10 percent of the annual turnover and changes must be made to its services.