The Impact of Europe's Regulatory Battle with Apple on US Consumers

While the United States government's monumental antitrust lawsuit against Apple may take years to settle, Europe's regulatory confrontations with the iPhone maker shed light on potential changes for American consumers in the future.

The US lawsuit aims to prevent Apple from harming technologies competing with its own apps in areas such as streaming, messaging, and digital payments. The Justice Department also seeks to stop Apple from including terms in its contracts with developers, accessory manufacturers, and consumers that could allow it to gain or maintain a monopoly.

These issues parallel the longstanding dispute between Apple and the European Commission, the European Union's executive arm and chief antitrust law enforcer.

The EU's antitrust watchdogs have leveled several charges against Apple, accusing it of violating the bloc's competition laws by attempting to monopolize computer markets. This comes alongside stringent digital regulations intended to prevent tech giants from dominating these markets.

Brussels' efforts will soon start influencing how the company does business and affects iPhone user experiences in Europe. These changes could foreshadow what might be in store for Apple users in the US, should the Justice Department succeed.

Music Streaming

Traditionally, music streaming users on iPhones couldn't directly pay for subscriptions to services like Spotify or receive emails about subscription pricing, promotions, and offers from these competitors. Apple imposed strict restrictions to protect its own Apple Music service from competition.

This behavior led to a multi-year EU investigation that resulted in a directive for Apple to alter these practices and imposed a hefty fine of 1.8 billion euros ($2 billion) to deter future misconduct.

Margrethe Vestager, the European Commission's competition chief, labeled Apple's practices as 'illegal' and emphasized their impact on millions of European customers who couldn't freely choose where, how, and at what price to purchase music streaming subscriptions.

Payments

Apple attempted to settle another EU antitrust accusation by proposing that third-party mobile payment service providers have access to its iOS instant payment functionality.

After accusations in 2022 of abusing its dominant position by restricting access to its mobile payment technology, Apple offered concessions to the European Commission. The Commission has been evaluating if the rules of Apple Pay coerce online stores into making it the default payment option, thereby excluding rival payment systems, and if Apple limits competitors' access to the iPhone's contactless payment feature.

The Commission is considering the proposal, seeking feedback from stakeholders before reaching a decision.

App Stores

Apple has long insisted that there should only be one app marketplace for iOS devices: their own. However, the EU's Digital Markets Act (DMA), recently put into effect, has compelled Apple to open its 'walled garden' and allow competition from external app stores.

The DMA is directed at large tech 'gatekeepers' and outlines what they can and cannot do, with the goal of opening closed tech ecosystems that trap consumers within a single company's products or services.

According to the DMA, tech companies must not prevent consumers from interacting with businesses outside of their platforms, resulting in Apple being forced to allow Europeans to download iPhone apps from stores not operated by the tech giant—an idea it had long resisted.

As an indication of this resistance, EU regulators expressed their intention to inquire into allegations that Apple prevented video game company Epic Games from launching its own app store. However, Apple relented, enabling Epic Games, the maker of Fortnite, to establish its competitive app store.

Apple, EU, antitrust