Apple faces two EU anti-competition probes

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Apple faces two European Commission probes into whether it has broken competition rules.

One investigation centres on iPad and iPhones being limited to installing apps from Apple’s own App Store, among other restrictions imposed on third-party developers.

The other involves Apple Pay, with one issue being that other services cannot use the iPhone’s tap-and-go facility.

Apple said it was “disappointing” the EU was “advancing baseless complaints”.

And it accused companies that had raised allegations against it of wanting a “free ride”.

“Our goal is simple: for our customers to have access to the best app or service of their choice, in a safe and secure environment.”

Apple is also under scrutiny in the US where the House Judiciary Committee is reported to have asked for its chief executive Tim Cook to appear alongside other tech leaders to answer questions about anti-trust concerns.

Amazon has said that its chief executive Jeff Bezos is willing to testify, so long as Mr Cook and his counterparts at Facebook and Google also give evidence.

The latest development comes days before Apple holds its annual developers conference.

App sales

The investigation into Apple’s App Store stems from a complaint raised by the music streaming service Spotify.

Last year, it raised two specific concerns:

  • the only way developers can sell content and/or subscriptions directly within an iOS app is via Apple’s own system
  • publishers cannot tell users within their apps that the same items can be bought elsewhere – for example via the service’s own website

Apple typically charges apps a 30% cut of any sales, although that rate falls to 15% for the second and later years of any subscription.

Publishers often sell media and other digital goods at a lower price when bought outside of their apps, but consumers can be unaware of the fact.

Since Apple only allows apps to be downloaded from its own store, and has repeatedly updated its mobile operating system to prevent “jailbreaks” that circumvent this rule, it is argued that third-parties have little option but to comply with its conditions.

The only alternative is to offer their products as web-based services, which can limit their functionality.

The Financial Times has reported that Rakuten’s online bookstore Kobo recently contacted the European Commission with similar concerns.

“Apple’s anti-competitive behaviour has intentionally disadvantaged competitors, created an unlevel playing field, and deprived consumers of meaningful choice for far too long,” said Spotify in response to the latest development.

“We welcome the European Commission’s decision to formally investigate Apple, and hope they’ll act with urgency to ensure fair competition on the iOS platform for all participants in the digital economy.”

What today’s move is about is the huge power over prices and innovation that control of a platform gives to a tech giant.

Ever tried to buy a Kindle book via Amazon’s iPhone apps? You can’t because Amazon doesn’t want to see Apple walk away with a 30% cut of the purchase price.

App developers big and small have protested over the years about what they see as Apple’s abuse of its position as a gatekeeper to its iOS platform.

Similarly, the tech giant’s strict controls on the way NFC (near-field communication) works on its phones has sparked complaints that Apple Pay has huge advantages over what could be more innovative payment systems.

Complaints about this behaviour aren’t limited to Europe, but once again the EU’s Competition Commissioner and Executive Vice President Margarethe Vestager has shown that she wants to set the pace in pushing back against the power of the big tech platforms.

And another American behemoth may be about to feel the heat – all the signs are that Ms Vestager is about to determine the outcome of an existing probe into how Amazon controls its online retailing platform.

More to follow

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