Apple Pay, App Store under EU scanner ahead of WWDC 2020

Apple is set to host WWDC 2020 between June 22 and June 26.

The first probe looks into the company’s antitrust practices in regard with the App Store. The probe takes a deeper look into the company’s Apple Pay norms. (REUTERS)

Apple is set to host its annual developers conference, Worldwide Developers Conference (WWDC) 2020, in an online format between June 22 and June 26. Ahead of its annual shindig, the company is facing two antitrust probes by the European Commission.

The first probe looks into the company's antitrust practices in regard with the App Store. The probe takes a deeper look into the company's Apple Pay norms.

Apple's App Store investigation

Apple takes a 30% cut in the revenue generated by developers via subscriptions. The first probe opened by the EU looks into 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 probe will look into two specific aspects of the company's policies. First is the mandatory use of in-app purchase system for the distribution of paid digital content and the second is the restrictions on the ability of developers to inform users of alternative purchasing possibilities outside of apps.

The European Commission opened a probe after complaints filed by Spotify and an e-book/audiobook distributor on the impact of the App Store rules on competition in music streaming and e-books/audiobooks.

“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...We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers,” Executive Vice-President Margrethe Vestager said in a statement.

Apple's Apple Pay investigation

The second probe looks into the company's Apple Pay rule and whether or not they violate EU competition laws. The probe will look into 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.' It will also look into the fact that other payment options cannot use NFC on iPhones and iPads to offer tap-and-go functionality.

“Mobile payment solutions are rapidly gaining acceptance among users of mobile devices, facilitating payments both online and in physical 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,” Vestager added.

What is Apple saying?

Apple has said that it is disappointed that the EU is acting on the 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.”

"Our goal is simple: for our customers to have access to the best app or service of their choice, in a safe and secure environment," Apple said, as reported by BBC.