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Apple under EU scrutiny over distorting competition

Apple is under investigation from the EU over breach of European competition rules. Some of the app creators have also criticised Apple's third-party policies terming them hostile.

twitter-logoYasmin Ahmed New Delhi Last Updated: June 18, 2020 | 13:59 IST
(Source: Reuters)

Highlights

  • Apple is being investigated for the criteria it set for developers to pay only through the company's in-app purchase system.
  • Another concern is the ban on developers telling users of other ways to pay for digital content outside of the in-app system.
  • A report stated that the in-house developers have stated that the way the company treats its third-party developer community is hostile.

The European Union is investigating Apple Pay and iOS App Store over breach of European competition rules, EU's competition commission announced.

Apple's business practises have drawn criticism from its competitors. If the iPhone maker is found to breach EU competition rules it could face penalties of up to 10% of its global turnover, a report by The Guardian stated.

As per the report, developers can distribute iPhone and iPad apps through the App Store only. Apple is being investigated majorly for two concerns.

The first one is the criteria for developers to pay through the company's in-app purchase system from which Apple reportedly takes a 15-30 per cent cut. The second is the ban on developers telling users of other ways to pay for digital content outside of the in-app system.

Apple has however backed its security and privacy policies by stating that the company aims to make the App Store "a safe and trusted place for customers to discover and download apps, and a great business opportunity for entrepreneurs and developers."

Margrethe Vestager, the EU's competition chief said, "We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service, Apple Music, or with Apple Books. I have therefore decided to take a close look at Apple's App Store rules and their compliance with EU competition rules."

A report by the BBC stated that some creators of the apps have said that it is hostile, the way the company treats its third-party developer community. The backlash reportedly happened after a row between Apple and the developer community who have made a new email app. The clash happened over a demand that Apple is given the means to take a cut of the services' subscription fee.

The EU is also investigating Apple Pay, the company's contactless, and online payment service. The major reason behind this is that "Apple's measures do not deny consumers the benefits of new payment technologies, including better choice, quality, innovation, and competitive prices."

Apple in a statement has said, "It's 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."

Apple CEO Tim Cook has previously said that he thought it was fair for Apple to come under scrutiny, but the firm was not a monopoly in any of the markets it operated in.

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