Apple Defies EU Over Antitrust Charges in Spotify Probe

Apple Inc. is set for a showdown with European Union antitrust regulators, insisting it doesn’t need to make any more changes to its App Store after it was hit by formal charges over its treatment of music streaming rivals such as Spotify Technology SA.

Apple Inc. is set for a showdown with European Union antitrust regulators (REUTERS)

Apple Inc. is set for a showdown with European Union antitrust regulators, insisting it doesn't need to make any more changes to its App Store after it was hit by formal charges over its treatment of music streaming rivals such as Spotify Technology SA.

Ahead of a hearing in Brussels on Friday, the iPhone maker insists that the EU wrongly accused it of illegal curbs on the likes of Spotify that prevent developers from steering users away from the App Store.

Apple considers it already addressed any possible competition concerns over the past two years with changes that create a fair balance between the interests of Apple and app developers, according to a person familiar with the US firm's thinking, who spoke on condition of anonymity.

Apple was slapped with a revised charge sheet by the EU in February, which showed the commission had narrowed its probe, but continued to focus “on the contractual restrictions that Apple imposed on app developers which prevent them from informing iPhone and iPad users of alternative music subscription options.”

Spotify says that Apple's anti-steering rules prohibit it and other developers “from telling consumers about any deals or promotions through their own apps.”

“These rules still exist today and Apple's supposed changes in fact change nothing at all and are just for show,” Spotify said in a statement. “We support the European Commission and believe that the” charge sheet “addresses Apple's unfair business practices.”

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Spotify has been one of Apple's fiercest critics, pressing the EU's antitrust unit into action with a complaint over how Apple takes an unfair cut of its subscription fees. The commission declined to comment.

Apple earlier this year had a separate hearing in a second EU antitrust probe into its tap-to-pay technology. In that case, the commission argues that the tech firm abuses its control over mobile wallets by limiting how third-party firms can provide services on the iPhone.

Regulators have since followed up with a series of questions to retailers, exploring other payment solutions across mobile devices. The February hearing homed in on some of the issues the commission is looking into but no formal remedies have been handed in so far, the person said.

Apple faces potential fines of as much as 10% of its annual sales if it fails to convince the commission of its arguments in either case and antitrust regulators conclude there's been an infringement of EU rules — although penalties seldom reach such levels. There is no legal deadline for the commission to conclude its probes.

The antitrust probes coincide with sweeping new EU rules that will rein in how U.S. tech firms operate in the region. The measures, designed to work alongside traditional antitrust powers, aim to prevent companies from abusing their power as gatekeepers to digital technology.