CMA launches Apple App Store investigation over alleged anti-competitive behaviour
At the beginning of March, the CMA announced that it had launched an Apple App Store investigation over allegations that the company has been imposing unfair terms and conditions on developers looking to sell their apps via the App Store.
The App Store is the only means by which iPhone and iPad users can download third-party apps to devices, meaning Apple can control the ways in which all apps are distributed. As this is only the beginning of the investigation, the CMA has highlighted that this is not yet a confirmation that Apple has breached competition law.
It comes after two antitrust investigations by the European Commission into Apple were launched last June, one of which also concerned the App Store and the limits it places on app developers. The other is related to Apple Pay, and similarly raises the issue that other mobile payment services cannot be used on iPhones.
Allegations surrounding Apple’s App Store
Allegations that Apple could be limiting the profits of developers and the choices available to consumers must be taken seriously. The CMA routinely investigates the operations of market giants like Apple and, as advocates of fair competition, we hope that the investigation will root out any potential problems.
The Apple App Store investigation has arisen out of the CMA’s own investigative work into competition in digital markets broadly, as well as complaints made by app developers. The criticism of the developers concerns the fact that Apple has full control of the distribution of apps via its App Store, meaning developers could be forced to agree to terms which they allege can be restrictive and unfair.
It is understood that developers have also criticised the fact that any of the add-ons or in-app features they offer must also be purchased via Apple’s payment system. Commissions of up to 30% can be charged by Apple to all third-party developers whenever an app or an add-on is purchased.
How the Apple App Store investigation may proceed
Over the course of the Apple App Store investigation, the CMA may look to ascertain whether or not Apple may have a dominant market position for app distribution. It may also likely look at whether or not Apple is imposing unfair terms on developers; the result being that that consumers may have a more restricted choice of apps and may be paying over the odds for their app purchases.
According to a brief schedule set out by the CMA, the investigation is set to gather information, issue requests for information to the relevant parties, and then analyse and review the findings. This section of the investigation will take place between March-September 2021.
You can read more about the CMA investigation here.
Breaches of competition law
If the Apple App Store investigation finds that Apple has breached competition law, the company may be subjected to enforcement action and financial penalties. A review of their practices will hopefully ensure that both developers and consumers are getting a fair deal.
Any business owners or consumers who believe that they have been victimised by unfair anti-competitive practices may be able to claim compensation. The CMA may impose fines, but it does not compensate the victims, and this is something businesses may be able to look into.
IMPORTANT: advice on this page is intended to be up-to-date for the 'first published date'.
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