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The European Commission has dropped a charge related to Apple’s 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 said it “no longer take[s] a position as to the legality of the [in-app purchase] obligation” and “rather 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”.
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 “anti-steering provisions”, 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’s analysis, the commission “does not take a position as to whether it is legal or not for the purposes of this antitrust investigation”, the commission’s spokesperson told VIXIO.
The EU watchdog has three parallel probes into Apple’s app store rules, looking at the bigtech’s 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 “would — in the case of music streaming apps — 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”, the spokesperson added.
The regulator’s decision to drop the in-app payment charge comes as the bloc is preparing for the Digital Markets Act (DMA), which intends to curb bigtech “gatekeepers'” 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’s 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’s app store guidelines do not generally allow apps to use or promote other purchasing tools, last March the company introduced an exception for so-called “reader” apps, which may use a link that takes consumers to an alternative payment method.
These apps are defined as those that allow users to “access previously purchased content or content subscriptions”, such as magazines, newspapers, books, music and video.
An Apple spokesperson told VIXIO it is pleased that the commission has narrowed its case and “is no longer challenging Apple’s right to collect a commission for digital goods and require the use of the in-app payment systems users trust”.
The spokesperson added that the “app 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”.
Spotify also welcomed the announcement, saying that it “sent a clear message that Apple’s anti-competitive behaviour and unfair practices have harmed consumers and disadvantaged developers for far too long”.
