Is the music stopping for Apple?

Has Apple Inc exploited its dominance to squeeze out rivals? Whatever the technicalities, the fact that there are now formal charges against the world’s most valuable company should start to change its attitude towards competition.
The European Commission hit Apple with an antitrust complaint for abusing its role as the App Store gatekeeper and disadvantaging Spotify Technologies SA’s music-streaming service. The financial impact of any ruling is unlikely to move the needle on the California-based company’s earnings — its services segment, which includes the App Store, generated 19% of the company’s $90 billion in first-quarter revenue.
But although the iPhone maker has been embroiled in a multi-year tussle with the European Union over its tax affairs and is the subject of a US Department of Justice investigation, this is the first time it has been charged with anticompetitive behaviour.
That’s significant. In the past, Apple has often looked like a company that hasn’t worried too much about whether it has market dominance. Now that it’s facing the real prospect of significant fines and changes imposed on its business model, it will have to take seriously that its actions could be perceived as monopolistic.
Spotify asserts that this pushes users towards the rival Apple Music service, since it appears to be cheaper. Apple says in its defense that the App Store has always been this way and that Spotify has anyway built a successful business on its platform. But that’s also the heart of the problem.
When Apple first built the App Store 13 years ago, the company was a lot smaller than it is today. It didn’t have to worry too much about whether what it was doing could be considered anticompetitive, because there were plenty of rivals out there offering alternative smartphones and operating systems. But these days it’s a $2.2 trillion behemoth with more than 50% share in a lot of smartphone markets. It needs to think a little differently about the effect of its actions.
Evidence suggests that Apple has historically not been preoccupied with antitrust. Last year, a beta version of its operating
system for mobile and desktop devices demonstrated plans to redirect news-story readers clicking on a link on a web browser to its News app, and away from news organisations’ own websites.
Last week, emails from 2013 were published showing Apple software chief Craig Federighi objecting to the idea of making Apple’s iMessage service available on devices using Google’s Android software. “I am concerned [that] iMessage on Android would simply serve to remove an obstacle to iPhone families giving their kids Android phones,” he said, according to tech news website the Verge.

—Bloomberg