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Apple responds swiftly to two new EU Antitrust Investigations into their App Store and Apple Pay Practices

1 x Cover EU Commission


Earlier this morning Patently Apple posted a report titled "Kobo, the eBook Company, Joins Spotify in filing a complaint against Apple's App Store with the EU Antitrust Commission." A new report has now surfaced that the EU is in fact opening a formal investigation into two Apple services being the App Store and Apple Pay.


Apple on Tuesday found itself the target of two EU antitrust investigations into its App Store and Apple Pay as regulators said its terms and conditions and restrictions may violate the bloc’s competition rules.


Apple was swift to respond by stating that a few companies of filing groundless complaints and criticized EU antitrust regulators for listening to them and opening two investigations into its Apple Pay and App Store.


Further, the statement read: "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."


The first announcement from the EU Commission that Apple wasn't happy about is titled "Antitrust: Commission opens investigations into Apple's App Store rules."


The announcement states in-part that "The European Commission has opened formal antitrust investigations to assess whether Apple's rules for app developers on the distribution of apps via the App Store violate EU competition rules. The investigations concern in particular the mandatory use of Apple's own proprietary in-app purchase system and restrictions on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps.


The investigations concern the application of these rules to all apps, which compete with Apple's own apps and services in the European Economic Area (EEA). The investigations follow-up on separate complaints by Spotify and by an e-book/audiobook distributor on the impact of the App Store rules on competition in music streaming and e-books/audiobooks.


Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "Mobile applications have fundamentally changed the way we access content. Apple sets the rules for the distribution of apps to users of iPhones and iPads. 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."


Vestager added that "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." 


The second announcement from the EU Commission that Apple wasn't happy about is titled "Antitrust: Commission opens investigation into Apple practices regarding Apple Pay."


The announcement states in-part that "The European Commission has opened a formal antitrust investigation to assess whether Apple's conduct in connection with Apple Pay violates EU competition rules. The investigation concerns Apple's terms, conditions and other measures for integrating Apple Pay in merchant apps and websites on iPhones and iPads, Apple's limitation of access to the Near Field Communication (NFC) functionality (“tap and go”) on iPhones for payments in stores, and alleged refusals of access to Apple Pay.


The investigation concerns the above conducts of Apple in the European Economic Area (EEA).


Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "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. It appears that Apple sets the conditions on how Apple Pay should be used in merchants' apps and websites."


Vestager further stated that "It also reserves the 'tap and go' functionality of iPhones to Apple Pay. 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."


Apple Pay is Apple's proprietary mobile payment solution on iPhones and iPads, used to enable payments in merchant apps and websites as well as in physical stores.


Following a preliminary investigation, the Commission has concerns that Apple's terms, conditions, and other measures related to the integration of Apple Pay for the purchase of goods and services on merchant apps and websites on iOS/iPadOS devices may distort competition and reduce choice and innovation.


The Commission will investigate the possible impact of Apple's practices on competition in providing mobile payments solutions.


If proven, the practices under investigation may breach EU competition rules on anticompetitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union (TFEU)) and/or on the abuse of a dominant position (Articles 102 TFEU).


The Commission will carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome."


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