(Bloomberg) — Apple could face steep fines, along with a ban on App Store rules it allegedly used to block music streaming rivals, in the European Union’s latest crackdown on Big Tech. There is sex.
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EU regulators are finalizing a decision against Apple’s practice of preventing music services from moving users away from the App Store and toward cheaper alternative subscription options, according to people familiar with the investigation. It is said that there is A decision is expected early next year, they added.
As part of the upcoming decision, Apple risks being fined as much as 10% of its annual revenue, although EU fines rarely reach that level and could force companies to change their business models. Change orders may be more stringent.
The investigation stems from a complaint about four years ago from Sweden’s Spotify Technology SA, which said Apple was trying to change the price of monthly subscriptions to cover costs related to its alleged control over how the App Store operates. He claimed that he had no choice but to withdraw the In a formal indictment in February, the European Commission pointed to Apple’s so-called anti-steering rules, saying the conditions were unnecessary and meant customers faced higher prices.
Apple took the position during a closed-door hearing in the EU case in June that it had already addressed any potential competition concerns, according to people familiar with the company’s U.S. thinking. In early 2022, Apple began allowing its Spotify and other music services to direct users to the web within their apps to sign up for subscriptions. This avoids Apple’s up to 30% revenue cut and provides consumers with more pricing and subscription options.
A few months ago, the company first agreed to allow apps to advertise lower subscription prices outside of the App Store. For example, Spotify and other developers can send emails informing customers of lower prices if they sign up online rather than through his App Store.
But Spotify pushed back against Apple’s efforts in June, saying the restrictions still existed and the changes were “just for show.”
The EU crackdown on App Store rules comes alongside a separate investigation focused on how Cupertino, California-based Apple controls tap-to-pay technology on its devices. ing. However, people familiar with the investigation say the company is in talks to resolve the matter. Across the Atlantic, app store fraud has garnered similar attention. This week, a jury found that Google was unfairly exercising its monopoly power, winning a case for Fortnite maker Epic Games, which was also unhappy with Apple’s App Store policies. .
Margrethe Vestager, who returned to the role of EU antitrust czar after an unsuccessful bid for the top job at the European Investment Bank, has a history of taking on Apple and other Silicon Valley giants. He fined Alphabet Inc.’s Google more than 8 billion euros ($8.6 billion) and ordered Apple to repay 13 billion euros for allegedly taking unfair tax cuts from Ireland.
The Brussels-based commission declined to comment on its future decisions. Apple did not respond to questions from Bloomberg on this topic. Spotify declined to immediately comment.
Read more: Apple hits back at EU over antitrust violations in Spotify investigation
The European Commission, the EU’s antitrust arm, is not only attacking companies’ past wrongdoings, but also pushing for sweeping new rules to stop competition law violations by technology companies before they take root. There is. The Digital Markets Act will come into full force in March 2024 and sets out a series of do’s and don’ts.
Under the DMA, it would be illegal for the most powerful companies to prioritize their own services over those of competitors. Combining personal data across different services would be prohibited, competing using data collected from third-party sellers would also be prohibited, and users would be required to download apps from competing platforms.
Apple, Meta Platforms Inc. and TikTok owner ByteDance Ltd. have all asked EU courts to reconsider whether some of their services should be subject to the DMA, with most profitable It is considered to be part of the core of the business model.
–With assistance from Stephanie Bodoni and Mark Gurman.
(Updates Apple’s App Store policy details starting in 5th paragraph)
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