EU narrows antitrust case against Apple over rules for music services like Spotify

KEY POINTS

• The European Union on Tuesday sent Apple an updated list of objections as part of an ongoing antitrust case over its App Store rules for music streaming providers like Spotify.
• The European Commission narrowed its preliminary "statement of objections" against Apple that it had issued in 2021.
• The commission, the EU's executive arm, opened an antitrust investigation into Apple in 2020 after Spotify complained about Apple's license agreements in 2019.

The world's biggest iPhone factory, located in China and run by Foxconn, faced disruptions in 2022. That is likely to filter through to Apple's December quarter results. Meanwhile, analysts questioned demand for the iPhone 14 from Chinese consumers.

Nic Coury | Bloomberg | Getty Images

The European Union on Tuesday sent Apple an updated list of objections as part of an ongoing antitrust case over its App Store rules for music streaming providers like Spotify.

The European Commission, the EU's executive arm, opened an antitrust investigation into Apple in 2020 after Spotify complained about Apple's license agreements in 2019. The agreements mean that app developers have to pay a 30% commission on all subscription fees that come through the App Store.

On Tuesday, the commission narrowed its preliminary "statement of objections" against Apple that it had issued in 2021. The statement initially alleged that Apple had "abused its dominant position" by imposing its own in-app purchase payment technology on music streaming app developers, and restricted developers' ability to inform iOS users of other available music subscription services.

The commission dropped the first charge on Tuesday and said it will focus on Apple's anti-steering obligations.

Shares of Spotify and Apple were largely unchanged Tuesday.

"Today, the European Commission sent a clear message that Apple's anti-competitive behavior and unfair practices have harmed consumers and disadvantaged developers for far too long," Spotify's general counsel, Eve Konstan, said in a statement. "We urge the Commission to reach a swift decision in this case to protect consumers and restore fair competition on the iOS platform."

Spotify, a direct competitor of Apple Music, is "by far" the most popular music streaming service in the U.S. and U.K., among other countries, according to a report by economists at the Analysis Group. IPhone users in the U.S. spend 50% more time on Spotify than Apple music, and in the U.K., the gap is even larger, the report said.

An Apple spokesperson said the company will continue to promote competition and work with the commission to respond to its concerns.

"We're pleased that the Commission has narrowed its case and is no longer challenging Apple's right to collect a commission for digital goods and require the use of the In-App Payment systems users trust," the spokesperson said. "The App Store has helped Spotify become the top music streaming service across Europe and we hope the European Commission will end its pursuit of a complaint that has no merit."

The company said that it has always worked to promote competition, and that it will continue to promote choice for European consumers.