EC Launches Antitrust Probe of Apple App Developer Rules

Apple may have breached EU competition law by requiring app developers to use its proprietary in-app purchase (IAP) system and restricting them from telling iPhone and iPad users about other, cheaper purchasing possibilities outside of apps, the European Commission said Tuesday. The antitrust probe concerns the application of the rules to all apps that compete with Apple's apps and services. The investigation follows complaints by Spotify and an e-book/audiobook distributor on the impact of App Store rules on competition in music streaming and e-books/audiobooks. Apple appears to have a "gatekeeper" role in the distribution of apps and content to users of its devices, said EC Executive Vice President Margrethe Vestager, who handles competition policy. The EC wants to ensure the rules don't distort competition in markets where Apple competes with other app developers, such as with its music streaming service or Apple Books. The commission is also looking into whether the tech giant's conduct on Apple Pay violates competition rules. The opening of a formal investigation doesn't prejudge its outcome, the EC noted. Apple didn't comment. The App Store makes it possible for thousands of small European developers to create and distribute their products and services worldwide, emailed ACT|The App Association Chairperson Mike Sax. ACT wants to ensure the EC "hears the voice of small app makers." An EC decision shouldn't affect the U.S. unless presumptive presidential candidate Joe Biden wins, emailed Cowen's Paul Gallant. Apple "appears to have forged the best relationship with Trump among Big Tech CEOs," but if Biden wins, all four tech platforms will face more Democratic scrutiny, the analyst said: If the EC forces Apple to allow non-IAP payments next year, a Biden DOJ is likely to ask, "Why not for US consumers too?"