Apple loses first major case involving App Store payment policies - The UpStream

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Apple loses first major case involving App Store payment policies

posted Saturday May 1, 2021 by Scott Ertz

Apple loses first major case involving App Store payment policies

There is no question that Apple's App Store policies are causing them a ton of trouble. They have been investigated by the European Union, The US Government, and more. There is a high-profile lawsuit against the company and a trade organization that has formed around changing Apple's policies. While Apple has continually argued that it's their store, their platform, and no one is required to participate, but many companies have disagreed - from Epic to Spotify, and that is where we pick up this week.

A complaint filed in the EU by Spotify in 2019 alleged that Apple's 30% fee for subscriptions in the App Store constitutes anti-competitive behavior, especially when it affects a direct competitor of Apple. In this case, Spotify and Apple compete with one another in the music streaming space and podcast space. The direct complaint was that, with the 30% fee for a service that Spotify does not want to use, they have to charge Apple customers $12.99 instead of $9.99 to make the same amount of money, while Apple can charge the $9.99, making their service look more attractive.

Of course, we all know that this story is bigger than just Spotify and Apple, or just Apple Music. This same complaint has been levied against the company from nearly every company that makes a competing product or service. This led the European Commission to look at it in larger terms, considering all of the surfaces on which Apple could use its 30% fee to hinder competition. And, the end result is a finding against Apple, showing that the company is engaged in illegal anti-competitive activity.

The EU does not take this charge lightly, with the potential for very stiff penalties. In fact, they European Commission has the option to fine Apple as much as 10% of all global turnover, which would amount to $27 billion. The Commission rarely, if ever, charges the maximum, but event 10% of the maximum 10% would take nearly $3 billion from the company. The amount of fine here is less important, though, than the ruling. With similar cases against Apple around the world, this could be the beginning of a change in tide for Apple, and a potential change in policy, similar to what we're seeing with other stores already.

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