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The European Commission has dropped a charge related to Apple鈥檚 in-app payment restrictions in one of its probes looking at app store rules.
The investigation, which stemmed from a complaint by Spotify, was looking at whether the iPhone maker restricted competition by making it mandatory for music streaming apps to use their proprietary in-app purchase system.
The European Commission it 鈥渘o longer take[s] a position as to the legality of the [in-app purchase] obligation鈥 and 鈥渞ather focuses on the contractual restrictions that Apple imposed on app developers which prevent them from informing iPhone and iPad users of alternative music subscription options at lower prices outside of the app and to effectively choose those鈥.
In April 2021, the commission said it had got to the preliminary view that Apple restricted competition by the combination of two rules, the mandatory in-app payment requirement and the so-called 鈥渁nti-steering provisions鈥, which limit the ability of app developers to inform users of alternative purchasing possibilities outside apps.
In addition to being mandatory, in-app payments are very expensive for app developers. Apple typically charges apps a 30 percent commission fee for each payment processed via its proprietary payment tool.
In an updated sheet of allegations, also known as the statement of objections, the commission now says it will not pursue the in-app payment charges any more.
As the in-app purchase obligation is no longer part of the agency鈥檚 analysis, the commission 鈥渄oes not take a position as to whether it is legal or not for the purposes of this antitrust investigation鈥, the commission鈥檚 spokesperson told VIXIO.
The EU watchdog has three parallel probes into Apple鈥檚 app store rules, looking at the bigtech鈥檚 practices related to different apps, namely music streaming, audiobooks and other apps not included in these categories. Until now, each of these investigations was, at least in part, looking at the legality of the in-app purchase requirement.
Apple is also under scrutiny for restricting near-field communication (NFC) technology for mobile payments in the EU.
The commission considered that the removal of the anti-steering obligations 鈥渨ould 鈥 in the case of music streaming apps 鈥 suffice to provide consumers with increased information on the purchasing options they have and allow them to make an effective choice where to buy them鈥, the spokesperson added.
The regulator鈥檚 decision to drop the in-app payment charge comes as the bloc is preparing for the (DMA), which intends to curb bigtech 鈥済atekeepers'鈥 dominance in digital markets.
Specifically, one of the measures of the EU law will allow developers to choose an alternative in-app purchase payment technology.
Most of the act鈥檚 provisions will come into force on May 2, which will also mark the start of the gatekeeper designation procedure. Once a company is designated as a gatekeeper, it has six months to comply with the DMA.
Furthermore, it should be noted that although Apple鈥檚 app store do not generally allow apps to use or promote other purchasing tools, last March the company an exception for so-called 鈥渞eader鈥 apps, which may use a link that takes consumers to an alternative payment method.
These apps are defined as those that allow users to 鈥渁ccess previously purchased content or content subscriptions鈥, such as magazines, newspapers, books, music and video.
An Apple spokesperson told VIXIO it is pleased that the commission has narrowed its case and 鈥渋s no longer challenging Apple鈥檚 right to collect a commission for digital goods and require the use of the in-app payment systems users trust鈥.
The spokesperson added that the 鈥渁pp 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鈥.
Spotify also welcomed the announcement, saying that it 鈥渟ent a clear message that Apple鈥檚 anti-competitive behaviour and unfair practices have harmed consumers and disadvantaged developers for far too long鈥.
