Apple once again finds itself in thick waters as the Competition and Markets Authority (CMA)-UK’s antitrust authority, launched an investigation into the company and its App Store to determine whether it was abusing its dominance in the market to restrict competition and setting terms and conditions for app developers that were “unfair and anti-competitive.”
“Millions of us use apps every day to check the weather, play a game or order a takeaway. Complaints that Apple is using its market position to set terms which are unfair or may restrict competition and choice – potentially causing customers to lose out when buying and using apps – warrant careful scrutiny,” said Andrea Coscelli, chief executive of the CMA, in a statement.
The CMA added that it would consider whether Apple has a dominant position in connection with the distribution of apps on Apple devices in the UK, considering that the App Store is the sole means for developers to distribute third-party apps on iPhones and iPads.
Apple has received severe backlash for its rigorous policy of requiring developers to use its in-app purchase system when building apps for its platform and pay Apple a 30% commission for all in-app transactions. In response, Apple announced a new program in 2020 that reduced the commission of the App Store to 15% for all small businesses which earn up to $1m per year.
In response to the CMA’s announcement, the Cupertino tech giant released a statement saying that it looked forward to working with the CMA to “to explain how our guidelines for privacy, security, and content have made the App Store a trusted marketplace for both consumers and developers.” A company spokesperson said that the company believed in thriving and competitive markets where any great idea can flourish.
“The App Store has been an engine of success for app developers, in part because of the rigorous standards we have in place — applied fairly and equally to all developers — to protect customers from malware and to prevent rampant data collection without their consent,” they added.
Damien Geradin, a lawyer representing some of the aggrieved developers, said that this investigation showed the impact of Brexit, giving the CMA more freedom and making it no longer necessary to get authorization from the European Union (EU). He added that while the CMA probe was likely to focus on in-app purchases, the regulators may broaden the scope to consider issues such as why Apple only allows one app store on its devices.
The investigation by the CMA is the latest blow Apple has faced in Europe. It currently faces separate investigations by the European Commission into its App Store and its Apple Pay mobile wallet. The CMA announced that it would continue to coordinate with the EU and other regulators, despite Britain formally leaving last year.
Additionally, Fortnite creator Epic Games Inc. had previously criticized Apple and its App Store, claiming that the App Store’s rules were anti-competitive and that Apple had removed its app after it tried to circumvent the app-purchase payment system.
