The CMA has launched an investigation into Apple following complaints that its terms and conditions for app developers are unfair and anti-competitive
In addition to designing, manufacturing and marketing electronic devices such as smartphones and tablets, Apple also operates the App Store. This is the only way for developers to distribute third-party apps on Apple’s iPhones and iPads, and the only way for Apple customers to access them.
The probe has been prompted by the Competition and Markets Authority’s (CMA) own work in the digital sector, as well as several developers reporting that Apple’s terms and conditions are unfair and could break competition law.
All apps available through the App Store have to be approved by Apple, with this approval hinging on developers agreeing to certain terms. The complaints from developers focus on the terms that mean they can only distribute their apps to iPhones and iPads via the App Store. These complaints also highlight that certain developers who offer ‘in-app’ features, add-ons or upgrades are required to use Apple’s payment system, rather than an alternative system. Apple charges a commission of up to 30% to developers on the value of these transactions or any time a consumer buys their app.
The CMA’s investigation will consider whether Apple has a dominant position in connection with the distribution of apps on Apple devices in the UK – and, if so, whether Apple imposes unfair or anti-competitive terms on developers using the App Store, ultimately resulting in users having less choice or paying higher prices for apps and add-ons.
This is only the beginning of the investigation and no decision has yet been made on whether Apple is breaking the law.
Andrea Coscelli, Chief Executive of the CMA said:
Today’s announcement follows the CMA’s July 2020 report on its market study into online platforms and digital advertising, and the CMA’s advice to the Government in December 2020 on the shape of a new pro-competition regulatory regime for digital markets. As the CMA works with the Government on these proposals – which will complement its current enforcement powers – the CMA will continue to use its existing powers to their fullest extent in order to protect competition in these areas.
The European Commission (EC) currently has four open antitrust probes into Apple, which were launched prior to the end of the UK’s Transition Period. These include three open investigations into Apple’s App Store. The CMA continues to coordinate closely with the EC, as well as other agencies, to tackle these global concerns.
More information can be found on the Investigation into Apple App Store casepage.
Notes to Editor