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Did Apple break EU competition rules? Bloc launches probes to find out

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In this photo taken Friday, Oct. 17, 2014, a cash register terminal promotes usage of the new Apple Pay mobile payment system at a Whole Foods store in Cupertino, Calif.
In this photo taken Friday, Oct. 17, 2014, a cash register terminal promotes usage of the new Apple Pay mobile payment system at a Whole Foods store in Cupertino, Calif.   -   Copyright  Eric Risberg/AP
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Brussels launched two probes on Tuesday into whether US technology giant Apple has broken EU competition rules.

One will look at its practices with App Store, the firm's marketplace for applications for smartphones and other devices. The other will look at Apple Pay, which allows users to make payments using their devices.

"Mobile payment solutions are rapidly gaining acceptance among users of mobile devices, facilitating payments both online and in physical stores," said Margrete Vestager, European Commissioner for Competition.

"It appears that Apple sets the conditions on how Apple Pay should be used in merchants' apps and websites. It also reserves the “tap and go” functionality of iPhones 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."

"I have therefore decided to take a close look at Apple's practices regarding Apple Pay and their impact on competition."

The investigation into App Store follows complaints by competitors Spotify and Rakuten that Apple was charging developers a 30% commission. Spotify argued that Apple was limiting choice and stifling competition.

"Mobile applications have fundamentally changed the way we access content," added Vestager.

"Apple sets the rules for the distribution of apps to users of iPhones and iPads. 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."

The tech giant rejected the allegations in a statement, arguing: "We follow the law in everything we do and we embrace competition at every stage because we believe ut pushes us to deliver even better results.

"It's disappointing that the European Commission is advancing baseless complaints from a handful of companies who simply want a free ride, and we don't want to play by the same rules as everyone else," it added.

Spotify said in a statement that they welcome the Commission's decision to formally investigate Apple and "hope they'll act with urgency to ensure fair competition on the iOS platform for all participants in the digital economy".

"Apple’s anti-competitive behaviour has intentionally disadvantaged competitors, created an unlevel playing field, and deprived consumers of meaningful choice for far too long," they added.

Rakuten, contacted by Euronews, declined to comment.

The Commission's twin investigations were announced just a day after Apple revealed that its App Store had supported $519 billion (€461 billion) in billings and sales globally in 2019.

Apple CEO Tim Cook praised the App Store as "a place where innovators and dreamers can bring their ideas to life".

"We're committed to doing even more to support and future the global App Store community — from one-developer shops in nearly every country to businesses that employ thousands of workers — as it continues to foster innovation, create jobs, and propel economic growth for the future," he added.

It is not the first time Commissioner Vestager has ruffled the feathers of large multinationals and Apple in particular,

In 2016, she ordered the California-based company to pay €13 billion in back taxes to Ireland, a decision Apple is challenging.