Apple doesn’t play fair!

Apple doesn’t play fair!It abused its power as big tech player to impose up to 30 % extra charges on non-Apple musicstreaming services - like Spotify, Deezer, YouTube Music, Soundcloud, Amazon Music, Tidal andQobuz – that offer in-app subscriptions through the Apple App Store. On top of that, Appleblocked them from informing consumers about cheaper options (i.e. subscription via thewebsite). As a result, users of these non-Apple music streaming services ended up paying highersubscription fees, up to up 30% extra, while Apple’s own Apple Music was left off the hook.This is unfair and this is anti-competitive. After Apple was slapped by the European Commissionwith a €1.8 billion fine, Euroconsumers is now asking redress for all consumers that fell victimto Apple’s unfair behaviour. Every consumer that has been systematically overcharged forlistening to Spotify, Deezer, YouTube Music, Soundcloud, Amazon Music, Tidal and Qobuz ontheir iPhone and iPad through the Apple App Store since July 2013 onwards should get backevery euro they paid extra.

Apple doesn’t play fair!Apple is a big player in the app distribution market. Through its Apple App Store it providesaccess to tons of applications, including for music streaming services. As such, this is not aproblem. What is a problem is that Apple abused this dominant position to impose up to 30 %extra charges on music streaming services like Spotify, Deezer, YouTube Music, Soundcloud,Amazon Music, Tidal, Napster and Qobuz through its Apple App Store. Overcharges that wereconsequently passed on the subscribers of these music streaming platforms, while its ownApple Music was left off the hook.More concretely: • The tech player imposed its own in-app purchase payment technology on musicstreaming app developers (‘IAP’ obligation), that comes with a 30% commission fee tobe paid to Apple. • Moreover, Apple prohibited music streaming services of informing their users aboutcheaper subscription options. They were blocked of redirecting iOS app users outsidethe Apple app Store ecosystem, i.e. towards the websites of the music streamingservices, where subscriptions were offered at a lower price, without the 30% overchargecosts. This is not fair towards these 3rd party music streaming services. And it is for sure not fairtowards the millions of users of these non-Apple music streaming services that needed to payup to 30% extra!The European Commission agrees. It called Apple’s behavior anti-competitive and illegal andfined the tech giant in March 2024 with €1.8 billion for abusing its dominant position. BEUC helped lay the grounds for this decision - with the support of Testaankoop, OCU, Altroconsumo and Deco - by intervening in the case to defend consumers’ voice.

Because of Apple’s unfair behaviour consumers had to pay systematically higher prices formusic streaming subscriptions, up to 30% more to be exact, without being informed aboutmore affordable subscription methods (i.e. subscribing on the streaming website).Apple’s extra fees on music streaming services like Spotify, Deezer, YouTube Music,Soundcloud, Amazon Music, Tidal, Napster and Qobuz in its Apple App Store were consequentlypassed on the subscribers of these music streaming platforms. For example: • Spotify: increased prices from EUR 9.99 to EUR 12.99 for iOS users to cover Apple’scommission fees, losing price competitiveness in the process • Deezer: increased prices from EUR 9.99 to EUR 12.99 for iOS users to cover Apple’scommission fees, losing price competitiveness in the process. • SoundCloud: Raised its "Go+" premium subscription price on iOS to EUR 12.99 comparedto EUR 9.99 on other platforms due to Apple’s restrictive policies. • Qobuz: Indicated that it would be unable to cover operating expenses without passingthe 30% commission fee to iOS users.

All iOS users (iPone and iPad) in Belgium, Italy, Spain and Portugal who subscribed to non-Applemusic streaming services (like Spotify, Deezer, YouTube Music, Soundcloud, Amazon Music,Tidal and Qobuz) through the Apple App Store since July 2013 and have not actively changedpayment method since.

For entire Europe, ware talking about more than 2 million consumers, around 500.000 of themare based in the Euroconsumers’ countries.More specifically, an estimated 55.000 consumers in Belgium are potentially affected by Apple’sunfair behavior, in Portugal it goes up to 36.000, in Spain that’s 205.000 music streamingsubscribers and in Italy even 210.000.

While Spotify is the largest music streaming service involved, also other streaming services likeDeezer, SoundCloud, Qobuz, Napster, YouTube Music, Amazon Music, and Tidal were equallyaffected by Apple’s same unfair behaviour. Their users all paid up to 30% fee when purchasingtheir subscription in the iOS app.

July 2013-now Apple’s unfair behaviour started in July 2013 when it introduced the fees for the mandatory useof its own in-app purchase payment method on non-Apple music streaming services withoutallowing them to refer to cheaper subscription options, and this is ongoing as we speak.

The exact amount per consumer depends on the duration and extent of the overcharges thatwere passed on to the consumer: • The overcharge is the difference between the online subscription (in browser) and thein-app purchase price for the music streaming subscription. This is on average €3/month, but the exact amount will depend on the music streaming service (see tablebelow). • This needs to be multiplied by the number of months the affected consumer wassubscribed in-app to the music streaming service. Besides monetary harm (see Section 9.3.2.1), the Anti-Steering Provisions also cause non-monetary harm to many iOS users of music streaming services in the form of reduced quality of service and less choice. Specifically, the Anti-Steering Provisions cause: (i) a degraded user experience in the apps of music streaming service providers that have disabled IAP and less choice of subscription plans in some iOS music streaming service apps, and (ii) frustration of iOS users that are not able to subscribe to any or some of the subscription plans of certain music streaming service providers in the respective iOS music streaming app.

On average music streaming service users, having a subscription via the Apple App Store, cancount on: Spotify: 109 € Youtube: 125 € Amazon Music: 39 € Soundcloud: 107 € Tidal: 168 € Napster: 200 € However, this is an average, not based on user-specific data (i.e. when user subscribed andstopped IAP payments). Some users might be entitled to much more damages, as they mighthave been overcharged for years. Others might only have a few months of IAP payments.

According to estimations Apple’s unfair abuse of power caused approximately 62.000.000 EUR harm to consumers in Belgium, Italy, Spain and Portugal: • For Belgium: 6.76 M • For Italy: 25.80 • For Spain: 25.11 M • For Portugal: 4.42 M

Apple breached European competition law that aims to secure a fair, healthy and competitiveEuropean Internal Market. The legal basis for this class action is Article 102(a) of the Treaty onthe Functioning of the European Union (TFEU) and Article 54 of the European Economic Area,that prohibit the abuse of a dominant market position.

Yes. • First of all, in March 2024 the European Commission has fined Apple over € 1.8 millionfor abusing its dominant position on the market for the distribution of music streamingapps to iOS devices through its App Store. The European Commission has already takenaction against companies before for similar anti-competitive practices under EUantitrust rules .• In the UK Apple is already defending itself against similar class action claims on behalf ofrepresentatives of both consumers and UK based developers. • In the US Apple settled with a class of small developers for similar charges for abuse ofpower in 2021

First of all, we want to bring back the money to all consumers that have been systematicallypaying up to 30% too much for their music streaming subscriptions through IAP because ofApples unfair abuse of power. Apple has been making profit for years (approximately 259million EUR in Europe) from unduly overcharges that were passed on to consumers. Now the European Commission has condemned and fined this behaviour, it’s about time Apple makesthings right for consumers and refunds every euro they charged extra.However, this action is not merely about getting compensation for consumers in Belgium, Italy,Spain and Portugal. With this class action Euroconsumers wants to take a stand against powerabuse and send a clear message to Apple and all other market players for that matter: withpower comes responsibility, not abuse. Fair competition is key to secure a well functioningmarket with high quality goods and services at the best price for consumers. Whenever oneplayer misuses its dominant position for its own benefit and to the detriment of other businessplayers and consumers, Euroconsumers will call out this anti-competitive behaviour and holdthem accountable

All affected consumers that paid too much for their music streaming subscriptions because ofApple’s unfair abuse of power should get financial compensation.

Euroconsumers is currently preparing the legal cases to be introduced in court in Belgium, Italy,Spain and Portugal in the upcoming months.

Class actions tend to take some time. From previous experiences we know that class actionlawsuits can even take several years before getting a solution.In the meantime Apple has also appealed the decision of the European Commission dd. March2024 to fine Apple with € 1.8 million for abuse of its dominant position. This appeal can impactthe duration of the class action.Although the road might be long, the goal and outcome is worth it!

Android did not impose similar restrictions that prevented developers from informing usersabout alternative – cheaper – subscription options.

At the basis of this class action is the decision of the European Commission to condemn andfine Apple over € 1.8 million for anti-competitive practices that have severely impacted musicstreaming services and their users.In doing so the European Commission provided a strong legal basis for consumers to seekcompensation for the damages Apple’s unfair behaviour inflicted upon them.

Apple denies the accusation and has now also appealed the decision of the EuropeanCommission's before the European Court of Justice (ECJ).

The European Commission is closely monitoring Apple’s compliance, especially in light of theobligations also arising from the Digital Markets Act.

This action is crucial to ensure fair competition and protect consumers from anti-competitivepractices that lead to higher prices.With its unfair behaviour and abuse of dominant position Apple has distorted the importantmarket of music streaming services. After all, given i.a. Spotify’s price increase as a result of the30% API fee, it is likely that many consumers signed up to an alternative cheaper musicstreaming service like Apple Music. This likely also impacted the ability of non-Apple musicstreaming platforms to further innovate to the benefit of consumers.Fair competition is key to secure a well-functioning market with high quality goods and servicesat the best price for consumers. Whenever one player misuses its dominant position for its ownbenefit and to the detriment of other business players and consumers, Euroconsumers will callout this anti-competitive behaviour and hold them accountable.

If successful, this class action should lead to lower subscription fees for music streamingservices for iPhone and iPad users using the iOS app. After all, the non-Apple music streamingplatforms would no longer need to pay the extra fees, leaving them no more reason to pass onthis high commission to consumers.

With this class action we want to secure more transparent, fair and competitive app storepolicies, not only for music streaming services but for all app developments. This will empowerapp developers to create new attractive tools. This will empower consumers to access morechoice and push for innovation. This will improve the market!

Yes, other app developers might equally benefit from the removal of anti-competitiveprovisions, leading to more competitive pricing for all kinds of subscriptions.

Yes, this can set a precedent and encourage other app stores to adopt more transparent andcompetitive practices to avoid similar fines and legal actions.