EU to investigate Apple Pay, App Store over alleged violation of competition rules

Apple Inc is facing two EU antitrust investigations into its App Store and Apple Pay as regulators said the terms and conditions might have violated the competition rules of the bloc. European Competition Commissioner Margrethe Vestager said in a statement that Apple appears to have obtained a “gatekeeper” role when it comes to the distribution of apps and content to users of Apple's popular devices.

Swedish music streaming service Spotify had filed a complaint against the tech giant for mandatory use of Apple's in-app purchase system and restrictions put on developers' ability to inform iPhone and iPad users of other cheaper purchasing possibilities. A similar grievance related to e-books and audiobooks has been filed by another rival.

Record fine for anti-competitive behaviour

Recently, France’s competition authority has slapped a record fine of 1.1 billion euros on Apple Inc. for anti-competitive behaviour within its distribution network. The two wholesalers Tech Data and Ingram Micro have also been penalised with 76.1 million euros and 62.9 million euros for one of the cartel practices.

“Apple had committed an abuse of economic dependence on its premium retailers, a practice which the Authority considers to be particularly serious,” said Isabelle de Silva, the head of the authority in a statement.

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In 2012, a distributor of high-end specialized Apple products complained about the uncompetitive practices followed by raids carried out at the headquarters of Apple and its wholesalers in 2017. Isabelle said that Apple and its two wholesalers had agreed not to compete and prevent distributors from competing with each other, thereby sterilizing the wholesale market for Apple products.

The head of the authority concluded that the “so-called Premium distributors” could not safely carry out promotions or lower prices, which led to an alignment of retail prices between Apple's integrated distributors and independent Premium distributors. Isabelle said that Apple has abused the economic dependence of these Premium distributors on it, by subjecting them to unfair and unfavourable commercial conditions compared to its network of integrated distributors.

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(Image: AP)