European Commission opens two competition investigations into Apple



The European Commission has opened two formal competition investigations into Apple in relation to its App Store and Apple Pay.

The App Store investigation will examine restrictions imposed by Apple in its agreements with companies that wish to distribute apps to users of Apple devices.

In particular, it will examine the mandatory use of Apple’s own proprietary in-app purchase system for the distribution of paid digital content, and restrictions on developers informing users of alternative purchasing possibilities outside of apps.

Apple charges app developers a 30 per cent commission on all subscription fees through its in-app purchase system, and developers are prevented from informing users about purchasing possibilities outside the app, which are usually cheaper.

Margrethe Vestager, the European Commission’s executive vice-president with responsibility for competition policy, said: “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.”

The Apple Pay 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 on iPhones for payments in stores, and alleged refusals of access to Apple Pay.

Ms Vestager 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. 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.”



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