European regulators open competition probe into Apple Pay

Marco Green
June 17, 2020

"It appears that Apple sets the conditions on how Apple Pay should be used in merchants" apps and websites", Ms. Vestager said.

It also includes sales from other apps such as Target and Best Buy, as well as travel booked through apps such as Expedia and United, and rides booked through Lyft and Uber. These were bought either through company-owned apps or virtual marketplaces.

Digital goods and services, from which Apple takes up to 15 to 30 per cent commission, generated $61bn.

The executive vice-president said that the Commission wants 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.

Apple on Monday released the results of a study that found its App Store spurred $458 billion (roughly Rs. 34.76 lakh crores) in sales past year from categories such as retail of physical goods, ride-hailing, and advertising from which the iPhone maker takes no commission. In-app Advertising Sales, on the other hand, accounted for another $45 billion and 44 per cent of that figure (around $20 billion) was from advertising in games.

The company said that Apple only receives commissions from the billings associated with digital goods and services, "more than 85% of the $519 billion total accrues exclusively to third-party developers and businesses of all sizes". Within this particular category, games was the largest generator of billings and sales.

An app store is a digital distribution platform for mobile apps.

Launched in 2008, the App Store is home to nearly 2 million apps and is visited by half a billion people each week across 175 countries.

Looking specifically at rules related to the distribution of apps, this investigation will focus on Apple's proprietary in-app purchase system and restrictions on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps. The data suggests that the Apple App Store transactions saw food delivery apps, including Zomato, Swiggy and Freshmenu, clock $31 billion in business. It will be interesting to see what the company has to say about the latest developments.

The company has repeatedly said it is a "flourishing economy" that is helping millions of developers globally. Although not officially involved, Netflix made the same move as Spotify, removing the in-app subscription option, and will likely benefit if the Commission forces Apple to make changes in the way it operates its App Store.

Other reports by Click Lancashire

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