European Union regulators accused Apple on Friday of violating the bloc's antitrust laws, alleging the iPhone maker distorts competition for music streaming by imposing unfair rules for rival services in its App Store.
The EU's executive Commission said it objected to Apple's rules for music streaming services that compete with its Apple Music service, saying they end up costing consumers more and limiting their choices.
The charges underscore the pressure Apple faces from EU regulators in Brussels, who have opened multiple investigations into the company. It also highlights the long-running feud between Apple and popular music streaming service Spotify over payments and app distribution.
One of the main concerns outlined by the EU centers on Apple's practice of forcing app developers selling digital content to use its in-house payment system, which charges a 30% commission on all subscriptions.
The EU's investigation, which was sparked by a complaint from Spotify, found that fees end up being passed on to consumers.
A second EU concern is that Apple prevents developers from telling users about cheaper ways to pay for subscriptions that don’t involve going through an app.
Apple rejected the charges, saying it was proud of its role in helping Spotify grow into a music streaming giant. The company also noted that Spotify doesn't pay Apple a commission for 99% of its paid subscribers.
“Once again, they want all the benefits of the App Store but don’t think they should have to pay anything for that,” Apple said in a statement. "The Commission’s argument on Spotify’s behalf is the opposite of fair competition.”
The EU’s competition commissioner, Margrethe Vestager, said while Spotify had grown despite Apple's rules, they appeared to hurt smaller music streaming players like Deezer and Soundcloud.
“Our concern is that Apple distorts competition in the music streaming market to the benefit of its own music streaming service, Apple Music," she told reporters in Brussels.
Vestager noted that Apple Music isn't subject to the same rules, which hurts rivals by raising their costs, reducing their profit margins and making them less attractive on the App Store. She said the problem is not the fee itself, but that Apple only charges it on payments for digital content and not other services such as transport or food deliveries. The EU's investigation found it typically pushed up the price of a monthly subscription to 12.99 euros ($15.70) from 9.99 euros, she said.
Apple's ban on communicating with customers means app makers can't get the same insights into their users that Apple does, such as the reason for canceling a subscription, Vestager said.
“Not only are they not allowed to mention their websites or any link to them in their own apps,” Vestager said. “They are also not allowed to send emails to users that created an account in the app in order to inform them about cheaper alternatives."
Apple has 12 weeks to respond to the EU's objections. Under EU competition law, companies could offer a remedy — Vestager indicated she thought “Apple should end the infringement" and not do anything that would have the same effect. Or else, companies could be fined up 10% of their annual revenue for breaches. For Apple, which reported $274.5 billion in revenue in its latest financial year, that could mean a fine of up to $27.4 billion.
Spotify welcomed the EU's move. It's "a critical step toward holding Apple accountable for its anticompetitive behavior, ensuring meaningful choice for all consumers and a level playing field for app developers,” the company's chief legal officer, Horatio Gutierrez, said in a statement.
Updated on April 30, 2021, at 11:12 a.m. ET with the latest details.
On Saturday, New York will join neighboring New Jersey and Connecticut in authorizing mobile sports betting. Matt Kalish, president and co-founder of Draftkings North America, joined Cheddar to talk about the landmark change that is estimated to rake in $500 million in annual tax revenue on a potential billion-dollar market. Kalish also addressed the possibility that legalized sports betting in the Empire State could cannibalize his company's revenues in the bordering states. "It's pretty inconvenient, you know, to go across the border to make a bet. And people were doing it, but I think it really stifled a lot of the opportunity," he said. "So while there's some of that going on, I think really a tremendous amount, like a giant percent, of New York will be very incremental."
James Tattersall, director of sales and marketing for Lake Nona Wave Hotel, talks about the hotel's initiatives to foster diversity and how these amenities champion inclusivity in the Orlando area.
Desmond Howard, former NFL wide receiver and Modelo college football playoff ambassador, joins Cheddar News to talk about the Modelo sweepstakes honoring the 30th anniversary of his iconic punt return.
Satoshi Island is looking to become the world's first blockchain-driven economy. James Law, the chief architect of the planned private community, joined Cheddar to discuss the vision for the potential crypto capital of the world and how it will be brought to life. For people looking to live on the island, Law said they will be able to purchase land and homes and even design their own dwellings both in real life and via the metaverse. "Satoshi Island has already been digitally scanned. We have an absolute digital twin already in our metaverse," he said. Citizenship applications are expected to be launched via NFTs, he told Cheddar.
Satellite launch service Virgin Orbit has gone public on the Nasdaq via a SPAC merger with NextGen Acquisitions with a valuation of about $3.2 billion. CEO Dan Hart joined Cheddar's "Between Bells" from in front of his LauncherOne rocket in New York City's Times Square to talk about what's next after the IPO, an upcoming "Above the Clouds" mission to deliver commercial and national security payloads, and the benefits of their rockets being launched from commercial 747 aircraft. "We can launch anywhere in the world," he said. "There are almost 80 space agencies across the world, for instance, and about 10 of them have space launch. We can give them a space flight capability overnight by taking a runway and turning it into a spaceport."
CEO Tim Cook made a staggering $98.7 million in total compensation for 2021. The majority of Cook's earnings came from stocks along with his salary of $3 million. Apple recently became the first publicly traded U.S. company to have crossed the $3 trillion valuation mark.
Tech and entertainment giant Sony appears to be getting serious about automaking. An electric concept SUV — the Vision S-02 — was unveiled at CES 2022 and is slated to be produced by a new subdivision, Sony Mobility. This comes after the company revealed the Vision S concept Sedan at CES 2020.
According to the Labor Department December report, the U.S added 199,000 jobs as opposed to the more than 400,000 that had been expected. William M. Rodgers III, vice president and director of the Institute for Economic Equality at the Federal Reserve Bank of St. Louis, joined Cheddar's Baker Machado to talk about the state of the economy and noted that, despite the miss, the drop-off in the unemployment rate signaled to him that the economy is moving in the right direction. "There was an upward revision of about 100,000, a little more than 100,000, for the months of October and November, so, again, I'm not as worried or looking at this as negative as you all are," Rodgers added. He also noted the next three months would likely see slower growth due to the winter but stated that it would remain in a positive direction.
The New York Times has acquired sports outlet The Athletic in a $550 million deal. The acquisition brings the Times closer to its 10 million paid subscribers goal by 2025.
