The European Union (EU) is reportedly preparing to take action against Apple over alleged anticompetitive practices in its App Store.
The EU regulators are investigating Apple’s blocking of music services from promoting the alternative, cheaper subscription options they offer outside of the App Store, Bloomberg reported Wednesday (Dec. 13).
If found guilty, Apple could face a significant fine and a ban on its App Store rules, according to the report.
The investigation was triggered by a complaint from Spotify, a Swedish music streaming service, which claimed that Apple’s practices forced it to raise its subscription prices, the report said.
This move comes as part of the EU’s ongoing crackdown on Big Tech companies, per the report.
The investigation by the EU’s antitrust arm, the European Commission, has focused on Apple’s anti-steering rules, which prevent music services from directing their users to subscribe through alternative platforms, according to the report.
In response to the investigation, Apple has argued that it has already addressed any competition concerns, the report said. However, the EU is expected to make a decision on the matter early next year.
If Apple is found guilty, it could face a fine of up to 10% of its annual sales, per the report. However, EU penalties rarely reach that level, and the regulators may also order the company to change its business practices.
The European Commission has focused on Apple’s alleged stranglehold on how the App Store operates and the resulting negative impact on competition, according to the report.
In early 2022, Apple made some changes to its App Store policies, allowing music services like Spotify to direct users to the web to sign up for subscriptions, bypassing Apple’s revenue cut, the report said. Additionally, the company permitted apps to advertise lower prices for subscriptions outside of the App Store. However, Spotify argued that these changes were insufficient and merely cosmetic.
The European Commission has been actively pursuing cases against Big Tech companies, per the report. Margrethe Vestager, the EU’s antitrust czar, has a history of taking on Silicon Valley giants and has imposed significant fines on Google and ordered Apple to repay alleged unfair tax breaks.