A trade group representing Spotify, Deezer and other music streaming services based in Europe has urged the European Union to reject Apple’s plan for complying with a recent regulator demand regarding in-app linking on iOS devices. It comes as a US judge scrutinises Apple's approach to complying with a similar order that was issued in the California courts.
Back in March, Apple was fined €1.8 billion by the European Commission following an investigation into the tech giant's App Store rules regarding in-app payments. Responding to a complaint from Spotify, EU regulators focused on what is often called the anti-steering provision, which stops app developers keen to avoid using Apple's commission-charging in-app transactions system from linking to alternative payment options outside the app.
That provision was deemed anticompetitive, with Apple told to change its rules as well as pay the mega-fine. In theory, Apple has complied. However, to include links to alternative payment options, app developers must sign up a ‘Music Streaming Services Entitlement’ document. And that involves committing to pay Apple a 27% commission on transactions stemming from an in-app link, only slightly lower than the 30% Apple charges on in-app payments.
Spotify has already hit out at that new condition, and now trade group Digital Music Europe has sent a letter to the Commission urging it to “reject this solution and take immediate action to bring Apple to compliance, including daily penalties”.
Complying with March’s decision regarding the anti-steering provision should have been “simple and straightforward” the letter adds. “All Apple needs to do is remove the unlawful anti-steering provisions from its App Store Guidelines. Instead, Apple is deploying the same playbook it has used time and time again in response to findings of abuse and illegal conduct by courts and antitrust authorities around the world”.
“Apple's new entitlement for music streaming services is a discriminatory programme that forces competitors to opt into a new regime run by Apple”, the letter continues. “One where Apple still imposes anti-steering restrictions, and even a new 27% commission for purchases made on the web for music streaming competitors that attempt to give consumers direct links to easy purchasing”.
“Apple’s insistence on extracting a 27% commission for purchases of music streaming subscriptions taking place entirely outside the App Store leaves consumers with no additional or better options than before the decision”, it concludes. “Ultimately, Apple’s proposed ‘solution’ does nothing to address - and in fact furthers - the harm caused by its abusive anti-steering provisions”.
In the US, a court in California ordered a change to Apple's anti-steering provision as part of a legal battle between the tech giant and Fortnite maker Epic Games. Apple’s plan for complying with that court order is more or less the same as the plan it is employing in Europe.
Unsurprisingly, Epic is as outraged as Spotify, and has urged the judge who issued the order, Yvonne Gonzalez Rogers, to formally reject the plan. To that end, lawyers for both Apple and Epic were in court this week presenting their respective arguments to Rogers.
Although Epic’s biggest grievance with Apple’s plan is the 27% commission, a hearing yesterday focused on other conditions Apple has put in place for app developers linking to external payment options. That included the fact that links can't be buttons, and the size of an alert that must be displayed telling the app user that “Apple is not responsible for the privacy or security of purchases made on the web”.
According to Law360, Rogers didn't seem impressed with the excuses provided by Apple’s lawyers for these conditions, calling the privacy alert a “full-size takeover” employing “scare-tactic language”, and musing that the motivation for at least some of the new rules seemed to be “stifling competition”.
Another session is scheduled tomorrow for Rogers to further scrutinise Apple’s plan.
