Apple Inc. (NASDAQ:AAPL) woes in Europe just inched a notch higher. The European Commission has opened two formal antitrust investigations over claims the tech giant continues to violate competition laws with App Store and Apple Pay Services.
Apple Antitrust Probe
European antitrust investigators are in hot pursuit of online gatekeepers over alleged anti-competitive practices aimed at blocking rivals and suppressing competition. The European Commission is looking at Apple’s rules with regards to the in-app purchase system to see if they violate competition laws.
The investigators are also looking at Apple regulation that bars developers from informing users from alternative purchasing avenues inside iOS apps. As it stands Apple charges developers 30% for every digital content or services they sell in its App store
EU investigators will also look into why Apple insists on Apple Pay being the only payment system within the iOS ecosystem. By restricting payment systems in the platform, the tech giant is essentially curtailing competition.
Disgruntled Developers & Brands
A probe by the European Commission comes hot on the heels of complaints raised by developers as well as big brands that use the App Store. Developers have consistently complained of the excessive fee structure that sees them losing as much as 30% on every content sold on the platform Spotify Technology SA (NYSE: SPOT) has gone as far as reporting the tech giant to the EU over its excessive fees as well as restrictive rules that continue to cripple competition in the ecosystem.
Apple has succeeded in implementing its fee structure as well as restrictive rules as developers and brands race to gain access to the more than 1.5 billion iOS devices in circulation. The fact that over 500 million people use the app store daily presents an ideal target market that brands and developers would do anything to gain access to.
If found guilty of anti-competitive practices, Apple could be hit by a massive fine. Last year, the European Commission fined Alphabet Inc. (NASDAQ: GOOGL) $1.7 billion fine for abusive practices in online advertising.