The European Union could file antitrust charges against Apple Inc. as soon as this week over App Store policies that allegedly harm the competition.

That’s according to a report today in the Financial Times, which attributed the information to multiple sources with “direct knowledge” of the matter. The insiders added that there’s a chance the announcement of the charges may be pushed back to a later date.

The antitrust action is expected as part of a probe that the European Commission, the European Union’s executive branch, opened into Apple last year following a complaint from Spotify Technology SA. Spotify accused the iPhone maker of imposing unfair terms on developers who publish their apps via the App Store. Those terms, the music streaming provider has argued, make it difficult for developers to compete.

The main focus of Spotify’s complaint are the iPhone maker’s rules around in-app purchases. Apple requires all in-app purchases to go through its payment processing system, known as IAP, and takes an up to 30% cut from developers’ revenues. 

Spotify has argued that it can’t offer users the convenience of buying subscriptions directly in its app’s iOS interface because doing so would require going through IAP and accepting the up to 30% fee. Apple’s fee, the music streaming provider claims, would force it to raise its subscription prices above those of the iPhone maker’s rival Apple Music service and thereby make it less competitive. On iOS, Spotify users currently can access the paid version of the app only by buying a subscription outside the App Store. 

The report today didn’t specify whether the EU will also file antitrust charges over the other accusations Spotify has leveled against Apple. Among other things, the music streaming giant claims Apple had limited its ability to send marketing promotions to customers who use iOS. 

Spotify Chief Executive Officer Daniel Ek even accused Apple of misusing its control of the App Store to act “as both a player and referee to deliberately disadvantage other app developers.” The statement drew a high-profile response from the iPhone maker at the time. Apple said that “Spotify seeks to keep all the benefits of the App Store ecosystem — including the substantial revenue that they draw from the App Store’s customers — without making any contributions to that marketplace.” 

Apple could face fines of up to 10% of its total annual revenue if it’s found to have violated EU competition law. Even a much smaller percentage could translate into a multibillion-dollar fine given that the iPhone maker closed its 2020 fiscal year with more than $270 billion in sales.

The company is also facing a legal challenge in the U.S. over its in-app purchase rules. Last year, video game maker Epic Games Inc. sued Apple in a California court with the goal of securing a ruling ordering Apple to let iOS developers use payment processing systems other than its own. Two months later, a congressional subcommittee found that Apple has monopoly power over iPhone app distribution.

If Apple is eventually ordered to ease its in-app purchase rules, the change could have a significant revenue impact. It’s estimated that the total value of app sales made through the App Store last year exceeded $60 billion, which means Apple’s cut could have been in the tens of billions of dollars. Opening the marketplace to external payment processing services could see some developers move away from Apple’s IAM system, as well as potentially create pressure on the company to lower its fees to stay competitive.

Image: Apple