Tech Brief: Apple Faces Fresh Antitrust Complaint From Kobo (Updated)
Apple is reportedly facing a fresh antitrust complaint in the European Union after Japanese e-commerce giant Rakuten's e-reader subsidiary Kobo alleges it's anti-competitive for the company to charge it a 30 percent commission for e-books sold through the App Store while promoting its own alternative, Apple Books. According to the Financial Times, which broke the development, Kobo has claimed it's losing out on business by forcing customers to go to its website to buy e-books, as it seeks to bypass Apple's walled garden restrictions.
For what it's worth, the accusation is an exact replica of a March 2019 complaint from Spotify, which said Apple's App Store commission tilts the playing field to disadvantage rivals and favour its own Apple Music streaming service. Then last month, tracking-app maker Tile argued in a complaint to the commission that Apple was abusing its power to unfairly favour its own upcoming tracking device, dubbed AirTags. It said the new location setting introduced in iOS 13 exempts Apple's own apps such as Find My but prohibits third-party apps from persistently accessing a user's location.
Update: The European Commission, the region's antirust regulator, has officially opened twin probes into Apple's App Store and Apple Pay practices. The investigations will particular concern Apple's mandatory use of its proprietary in-app purchase system (aka IAP) for the distribution of paid digital content, for which the iPhone maker charges app developers a 30 percent commission on all subscription fees through IAP.
The commission is also expected to take a closer into the lock-in effect of Apple Pay as well as the company's terms and conditions for integrating the digital wallet service in apps and websites. It's worth pointing out that Apple Pay remains the only service that can leverage NFC technology embedded on iOS devices to facilitate mobile payments, closing out rivals from implementing similar solutions on the platform.
"Apple sets the rules for the distribution of apps to users of iPhones and iPads," said Margrethe Vestager, the head of the E.U.'s antitrust division. "It appears that Apple obtained a 'gatekeeper' role when it comes to the distribution of apps and content to users of Apple's popular devices. 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 E.U. competition rules."
On the same day, Match, which owns dating apps like Tinder and OkCupid, added voice to the growing list of concerns against Apple's in-app purchase policy, saying "Apple is a partner, but also a dominant platform whose actions force the vast majority of consumers to pay more for third-party apps that Apple arbitrarily defines as 'digital services.' Apple squeezes industries like e-books, music and video streaming, cloud storage, gaming and online dating for 30 percent of their revenue, which is all the more alarming when Apple then enters that space, as we've repeatedly seen. [...] The overwhelming majority of apps, including Internet behemoths that connect people (rideshare/gig apps), or monetise by selling advertising (social networks), have never been subject to Apple's payments systems and fees, and this is not right."
If anything, the public criticism could encourage other developers to speak out and form the basis for more antitrust investigations beyond Europe.
Update: The European Commission, the region's antirust regulator, has officially opened twin probes into Apple's App Store and Apple Pay practices. The investigations will particular concern Apple's mandatory use of its proprietary in-app purchase system (aka IAP) for the distribution of paid digital content, for which the iPhone maker charges app developers a 30 percent commission on all subscription fees through IAP.
The commission is also expected to take a closer into the lock-in effect of Apple Pay as well as the company's terms and conditions for integrating the digital wallet service in apps and websites. It's worth pointing out that Apple Pay remains the only service that can leverage NFC technology embedded on iOS devices to facilitate mobile payments, closing out rivals from implementing similar solutions on the platform.
"Apple sets the rules for the distribution of apps to users of iPhones and iPads," said Margrethe Vestager, the head of the E.U.'s antitrust division. "It appears that Apple obtained a 'gatekeeper' role when it comes to the distribution of apps and content to users of Apple's popular devices. 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 E.U. competition rules."
On the same day, Match, which owns dating apps like Tinder and OkCupid, added voice to the growing list of concerns against Apple's in-app purchase policy, saying "Apple is a partner, but also a dominant platform whose actions force the vast majority of consumers to pay more for third-party apps that Apple arbitrarily defines as 'digital services.' Apple squeezes industries like e-books, music and video streaming, cloud storage, gaming and online dating for 30 percent of their revenue, which is all the more alarming when Apple then enters that space, as we've repeatedly seen. [...] The overwhelming majority of apps, including Internet behemoths that connect people (rideshare/gig apps), or monetise by selling advertising (social networks), have never been subject to Apple's payments systems and fees, and this is not right."
If anything, the public criticism could encourage other developers to speak out and form the basis for more antitrust investigations beyond Europe.
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