CMA launches investigation into suspected anti-competitive behaviour by Apple
The CMA has launched an investigation into Apple (NASDAQ: AAPL) following complaints that its terms and conditions for app developers are unfair and anti-competitive.
Apple operates its App Store as well as designing, manufacturing and marketing electronic devices such as smartphones and tablets.
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.
Apple’s App Store 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.
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 currently charges a commission of up to 30% to developers on the value of these transactions or any time a consumer buys their app.
“Millions of us use apps every day to check the weather, play a game or order a takeaway,” said Andrea Coscelli, Chief Executive of the CMA.
“So, 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.
“Our ongoing examination into digital markets has already uncovered some worrying trends. We know that businesses, as well as consumers, may suffer real harm if anti-competitive practices by big tech go unchecked.
“That’s why we’re pressing on with setting up the new Digital Markets Unit and launching new investigations wherever we have grounds to do so.”
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.
No decision has yet been made regarding whether Apple is breaking the law.