- The European Union's antitrust authorities are investigating whether Apple violated competition laws with the App Store, the iPhone maker's marketplace for mobile apps, and contactless payment service Apple Pay, per separate announcements.
- The App Store investigation will look into Apple's in-app purchase system that charges a 30% commission on app developers. The probe also will look at restrictions that prevent app developers from letting iPhone and iPad users buy content for a lower price outside of apps. The investigation follows complaints by audio streaming giant Spotify and an e-book seller that Apple's control of the App Store gives it an unfair advantage against competitors, according to a European Commission (EC) announcement.
- The investigation into Apple Pay will focus on the company's rules on how the payment service is used in merchants' apps and websites. It also will look at restrictions that prevent other payment apps from using the near-field communication (NFC) chip in Apple devices for "tap and go" payments.
The European Commission's formal probes into Apple's business practices follow complaints by rivals that the company unfairly restricts competition. It's too early to tell how the investigations will affect mobile marketers, including app developers that distribute content through apps and merchants that want to offer payment services other than Apple Pay. Europe's antitrust authorities may seek remedies that include a 10% fine on its yearly revenue and changes to Apple's business practices, The Wall Street Journal reported.
"It's disappointing the European Commission is advancing baseless complaints from a handful of companies who simply want a free ride, and don't want to play by the same rules as everyone else," an Apple spokesperson said in a statement cited by several news outlets. "We don't think that's right — we want to maintain a level playing field where anyone with determination and a great idea can succeed."
The investigations follow complaints from rivals and critics that have accused Apple of charging an onerous "Apple tax" on apps and content. Spotify says Apple's fee structure gives the iPhone maker an unfair advantage in marketing its rival Apple Music service, a complaint that Apple has denied. The EC also cited a March complaint from Kobo, the e-book seller owned by e-commerce company Rakuten, claiming that the App Store gives an unfair advantage to Apple Books.
Other app developers have sought to avoid the Apple Store's hefty commissions by developing alternate payment methods. Netflix last year stopped paying App Store fees by asking new subscribers to sign up for its video streaming service at its website after downloading its app. Epic Games, publisher of hit multiplayer game "Fortnite" that has criticized Apple and Google for their app store fees, may create an iOS version of its Epic Games Store, Gamespot reported — though it's unclear whether Apple would approve the app. Apple this year confirmed it has a program to let streaming video providers avoid the standard 30% fee on movie and TV show downloads, but not fees on ongoing subscriptions, The Verge reported.
The EC's antitrust investigations into Apple follow multiple probes into the company's possible anticompetitive behavior. Apple in March was hit with a record €1.1 billion ($1.23 billion) antitrust fine from France's competition authority, which accused the iPhone maker of masterminding a distribution cartel with wholesalers. In the U.S., the Justice Department, Federal Trade Commission and Congress are investigating big technology companies — including Apple, Amazon, Facebook and Google — for potential antitrust violations, Forbes reported.