Apple's App Store, Apple Pay targeted by EU antitrust regulators

By Foo Yun Chee

BRUSSELS (Reuters) - Apple (NASDAQ: AAPL) is being investigated by EU antitrust regulators over its App Store and mobile payment system Apple Pay as the bloc turns up the heat on gatekeepers of online platforms on which thousands of companies depend for business.

The European Commission said its investigation would look into Apple's requirement forcing app developers to sell to customers using its own in-app purchase system and rules preventing them from informing users of cheaper products elsewhere.

The investigation will also cover all apps which compete with Apple in Europe, which could be icloud and gaming apps, following informal information received by regulators.

The probe followed Swedish music streaming service Spotify's (NYSE: SPOT) complaint last year, which said Apple was unfairly restricting rivals to its own music steaming service Apple Music. Another gripe was the 30% fee levied on app developers.

Spotify welcomed the EU move. A smaller rival filed a similar grievance related to e-books and audiobooks in March this year.

"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," European Competition Commissioner Margrethe Vestager said in a statement.

The second case focuses on Apple's terms and conditions on how its mobile payment service Apple Pay should be used in merchants' apps and websites, and also the company's refusal to allow rivals access to the payment system.

Regulators are also concerned that Apple Pay, launched in 2014 as the company diversified from sales of devices like iPhones and iPads, is the only mobile payment service allowed to use the "tap and go" functionality on iPhones.

Apple was critical of the EU investigation.

"It's disappointing the European Commission is advancing baseless complaints from a handful of companies who simply want a free ride, and don't want to play by the same rules as everyone else," the iPhone maker said in a statement.

"We don't think that's right — we want to maintain a level playing field where anyone with determination and a great idea can succeed."

(Editing by Jane Merriman and David Evans)

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