By James Simons-
British regulators have launched an official investigation into Apple’s App Store, over “suspected anti-competitive behaviour”.
The investigation will examine allegations that it is unfair that Apple both makes its devices and controls the App Store which is the only way of getting software onto them, and whether it has abused that power.
The Competition and Markets Authority (CMA) said the investigations were in its infant stages and that “no decision has yet been made on whether Apple is breaking the law”.
The European Commission has four open antitrust probes into the company, and US antitrust regulators have also been scrutinising the store.
The new UK investigation was launched by the CMA’s “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”, it said.
The Chapter II prohibition in the Competition Act 1998 prohibits any conduct on the part of one or more undertakings which amounts to the abuse of a dominant position in a market, and which may affect trade within the United Kingdom.
The CMA may launch an investigation under the Competition Act 1998 if it has reasonable grounds to believe that there has been an infringement of competition law.
The CMA said that developers had complained it was unfair that the only way to get apps onto iPhones and iPads through the App Store is to agree to Apple’s terms. They also complained that Apple even takes a cut when sales are made within apps, and that they are required to use Apple’s own payment system rather than another that may be cheaper
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.
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.
Among the complaints is 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.