• Market Crumbs

The EU Eyes Tech Giants

Image via Sara Kurfeß on Unsplash

The European Union has been busy over the last week going after U.S. tech giants for antitrust violations.

Last week, news broke that the European Union is preparing to file formal antirust charges against Amazon for using third-party sellers data to compete against them. If found guilty, Amazon could potentially pay a fine of as much as 10% of its annual revenue.

Yesterday, the EU continued its campaign against potential antitrust violators as it launched two separate antitrust probes into Apple’s App Store and Apple Pay. The Commission, which is the EU's executive arm, will determine whether Apple's guidelines for app developers regarding the distribution of apps violates EU competition rules.

Apple takes 30% from in-app purchases and 30% from subscriptions during the first year an app is in the store, after which the amount declines to 15%. Spotify and Kobo have both filed complaints with the EU regarding the practice.

"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," said Margrethe Vestager, head of competition policy at the EU. "I have therefore decided to take a close look at Apple’s App Store rules and their compliance with EU competition rules."

As for Apple Pay, the Commission will investigate Apple's terms and conditions for integrating Apple Pay, limitation of access to NFC technology and allegations of refusals of access 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," Vestager said. "I have therefore decided to take a close look at Apple’s practices regarding Apple Pay and their impact on competition."

Apple didn't take the news of the probes particularly well.

"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," Apple said in a statement. "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."

Similar to the potential implications of Amazon's antitrust charges, the EU could fine Apple as much as 10% of its annual revenue. Additionally, the EU has the power to shut down tech services if it so chooses.

With the EU stepping up its campaign against tech giants for antitrust violations, it may only be a matter of time before they set their sights on other technology companies that have grown in dominance.

Leftover Crumbs

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