Apple’s App store being investigated following complaints of anti-competitive behaviour

Posted on: June 30th, 2021

The UK’s competition regulator, the Competition and Markets Authority (CMA) has launched an investigation into Apple after formal complaints were made by software developers that the tech giant is using its App Store to restrict competition and choice.

On Apple devices’ iOS smartphone platform, the App store is the way only way developers can distribute its apps for consumers to download.  Software developers claim that Apple’s terms and conditions are unfair and anti-competitive.

Our Comment

This is just the start of the investigation to be carried out by the CMA, so no decision has been made on whether Apple is breaking competition law.  It will be interesting to see how Apple fairs given the mounting investigations in both the US and Europe and that investors of Apple were warned in October that it faced a “material” financial risk from the regulatory pressure on its App Store.

The Background

The CMA is the latest regulator to look at Apple’s practises on the App Store.  At present, the European Commission has four open antitrust inquiries into the company, and US antitrust regulators have also been inspecting the App store. 

The Complaints

The only way a software developer can get its apps onto a consumer’s Apple goods is through the App Store which subsequently means having to agree to Apple’s terms.  In addition to this, Apple can charge fees of up to 30% on in-app transactions made by consumers, whereby the developer is also required to use Apple’s payment system rather than an alternative which could potentially be cheaper for them.

This issue is the fact that the choice as a consumer is therefore restricted.  The Chief Executive of the CMA, Andrea Coscelli said: “Millions of us use apps every day to check the weather, play a game or order a takeaway.  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.”

Apple’s response

In a statement, Apple confirmed it was looking forward “…to working with the UK Competition and Markets Authority to explain how our guidelines for privacy, security and content have made the App Store a trusted marketplace for both consumers and developers.” 

It further explained that Apple “…created the App Store to be a safe and trusted place for customers to download the apps they love and a great business opportunity for developers everywhere.  In the UK alone, the iOS app economy supports hundreds of thousands of jobs, and any developer with a great idea is able to reach Apple customers around the world.  We believe 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.”