California based multinational technology major Apple is reportedly undergoing an investigation by the European Commission’s antitrust regulators. It is being speculated that the company’s Apple Pay functions and App Store’s terms and conditions are violating the competition rules framed by the trade bloc.
According to Margrethe Vestager, the Executive Vice-President of European Commission, Apple has secured a gatekeeper role in its distribution of content and apps to the users of its devices. She has further clarified that it has become imperative to see that Apple’s rules do not disrupt the competition in markets where the company has a competing role with other app developers.
Sources claim that the European Commission has decided to follow a two-probe strategy for the investigation of Apple Inc. One will look into the company’s terms and conditions on Apple Pay ensuring their use on websites and merchant apps. The second probe will focus on the obligatory use of Apple’s proprietary in-app purchase system and the corresponding limitations on a developer’s ability to inform iPad and iPhone users about cheaper purchasing possibilities at other places.
The European Commission has reportedly initiated the investigation in response to a complaint from the Swedish music streaming service Spotify Technology and an e-reader company Kobo. Together, they have charged Apple of giving 30 per cent commission on every subscription via its App Store for the first year in addition to a rate cut of 15 per cent.
Speaking over the investigation, Vestager has stated that it is essential to check that Apple’s practices do not keep consumers away from the benefits of emerging payment technologies that provide better quality, innovation, choice, and competitive prices. An assessment of Apple’s measures and its effects on competition, therefore, becomes crucial, added Vestager.
According to the previous day’s pre-market trading in New York, Apple’s shares have been reported to be 1.9 per cent higher at USD 349.