Tim CookSource: Apple

What you need to know

  • The EU has announced a formal investigation into Apple practices.
  • Specifically, they are investigating Apple Pay and anticompetitive behavior.
  • It is also investigating Apple's App Store rules.

The EU has announced a formal investigation into possible antitrust practices carried out by Apple, with regards to both Apple Pay and the App Store.

In a press release the European Commission stated:

The European Commission has opened a formal antitrust investigation to assess whether Apple's conduct in connection with Apple Pay violates EU competition rules. The 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 ("tap and go") on iPhones for payments in stores, and alleged refusals of access to Apple Pay.

VP Margrethe Vestager said "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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In a statement, Apple said it was "disappointing the European Commission is advancing baseless 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. We don't think that's right — we want to maintain a level playing field where anyone with determination and a great idea can succeed."

The news comes following a preliminary investigation into the service, which has raised "concerns" that Apple's terms and conditions "may distort competition and reduce choice and innovation." It also noted that Apple Pay is the only NFC payment embedded into iOS for payments in stores.

The EU also announced a similar investigation into the App Store in a joint release:

The European Commission has opened formal antitrust investigations to assess whether Apple's rules for app developers on the distribution of apps via the App Store violate EU competition rules. The investigations concern in particular 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.

In particular, the commission will investigate the mandatory use of Apple's IAP system and Apple's 30% commission rate, as well as restrictions on developers when it comes to informing users of alternative purchasing possibilities outside of apps. It notes specifically a complaint lodged by Spotify in March of 2019.

You can read the full press releases here and here.