The European Union will start a formal probe of Apple in the next few weeks following Spotify’s antitrust complaint, the Financial Times reported.
The music streaming giant had complained to the EU’s antitrust agency earlier this year that Apple’s 30 percent cut of revenue was effectively a tax on competitors. The feud came as the iPhone maker moved into new business areas that compete with third-parties on its platform.
Apple has said it doesn’t charge for distributing free apps and only takes the 30 percent from paid subscriptions on its platform. It also said that rate drops to 15 percent for subscriptions of more than a year. The Cupertino, California-based company has said that the majority of customers of the music streaming service use the free, ad-supported product, and only “a tiny fraction” of the subscriptions fall under Apple’s revenue-sharing model.
Apple claims that Spotify wants all the benefits of its app store without contributing to the marketplace. Spotify says that Apple “routinely blocks” some of its product upgrades, such as integration with the Siri digital assistant and the Apple Watch.
The EU has studied the complaint and surveyed customers, rivals and others in the industry, which prompted the formal investigation, the FT said, citing three people familiar with the probe.
EU can impose fines that could be as high as a 10th of a company' s global sales.