- The European Commission announced two new antitrust investigations into Apple on Tuesday.
- The first will focus on Apple’s terms and conditions for its payment system Apple Pay.
- The second will focus on the levy Apple imposes on in-app purchases through its App Store.
- Apple hit back saying claims it abuses its market position are “baseless” and come from “a handful of companies who simply want a free ride.”
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The EU has opened two separate investigations into Apple.
The European Commission announced the probes on Tuesday. The first will look at the terms and conditions Apple places on its payment system Apple Pay.
The second will look at how Apple runs its App Store, specifically how the mandatory levy Apple places on some in-app purchases.
Apple Pay
The European Commission will be investigating three elements of Apple Pay’s business, according to its press release:
- Apple's terms and conditions for integrating Apple Pay in merchant apps and websites on iPhones and iPads.
- Apple's limitation of access to its NFC "tap and go" functionality on iPhones for payments in stores. Competition commissioner Magrethe Vestager said in a statement that Apple restricts "tap and go" to Apple Pay, suggesting this restriction is at the crux of the investigation.
- Alleged refusals of access to Apple Pay, although the Commission gave no details on where these allegations come from.
"Mobile payment solutions are rapidly gaining acceptance among users of mobile devices, facilitating payments both online and in physical stores. This growth is accelerated by the coronavirus crisis, with increasing online payments and contactless payments in stores," Commissioner Vestager said in a statement.
"It is important that Apple's measures do not deny consumers the benefits of new payment technologies, including better choice, quality, innovation and competitive prices. I have therefore decided to take a close look at Apple's practices regarding Apple Pay and their impact on competition."
The App Store Tax
The second investigation centers on the rules Apple sets for developers using its App Store, specifically a mandatory levy Apple places on any in-app purchases.
Although developers can place their apps on the App Store for free, Apple takes a 30% comission on any purchases made within those apps once a user has downloaded them.
The commission said this investigation was set in motion by a complaint from music-streaming giant Spotify last year and by a complaint from an e-book distributor. Although it does not name the e-book distributor, The Financial Times reported earlier today that Rakuten-owned Kobo filed a similar complaint against Apple in March of this year.
The complainants' argument is that by inflating prices on in-app purchases for developers, Apple gives an unfair advantage to its own music-streaming and e-book businesses, which compete with third-party developers.
"It appears that Apple obtained a 'gatekeeper' role when it comes to the distribution of apps and content to users of Apple's popular devices. We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books. I have therefore decided to take a close look at Apple's App Store rules and their compliance with EU competition rules," Vestager said.
Apple says the complaints are "baseless"
In a statement sent to Business Insider, an Apple spokesman said the company was disappointed the European Commission chose to launch the two investigations.
"It's disappointing the European Commission is advancing baseless complaints from a handful of companies who simply want a free ride, and don't want to play by the same rules as everyone else. We don't think that's right - we want to maintain a level playing field where anyone with determination and a great idea can succeed," he said.
"At the end of the day, 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. We welcome the opportunity to show the European Commission all we've done to make that goal a reality," Apple's spokesman added.