UK competition regulator launches antitrust probe into Apple

The UK competition watchdog has opened a probe into Apple over claims it imposes unfair terms and conditions on app developers, in the latest regulatory assault on the tech giant’s dominance. 

The Competition and Markets Authority will investigate whether Apple maintains a stranglehold over the app market through its App Store and whether it abuses its position as a gatekeeper for mobile services on the iPhone. 

Apple takes a 30 per cent commission on most digital purchases through the App Store, falling to 15 per cent for some subscriptions. Developers told the CMA that Apple was imposing unfair terms and conditions on them in return for selling their apps to customers through the App Store, which remains the only marketplace for iPhone and iPad apps.

The watchdog said it would consider whether Apple’s control of the market resulted in “less choice” for customers, or in users paying “higher prices for apps and add-ons”.

The probe, which is in its earliest stages, is the second large antitrust investigation the CMA has launched into a technology company in just two months, following its probe into Google’s web browser changes in January. 

CMA chief executive 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.”

The investigation follows complaints around the world from companies including music service Spotify and Epic Games, the games developer behind Fortnite, that Apple’s rules constrain their ability to run their businesses on iPhones and iPads. The CMA said it had received complaints from “several developers” but did not name them. 

In February, Coscelli also pledged to mount a series of antitrust investigations into internet companies such as Google and Facebook, even as the CMA awaits new powers to run a technology regulator, which is due to be launched later this year. 

As it faces mounting investigations in the US and Europe, Apple has always insisted that its App Store controls are designed to ensure ease of use and security for its customers.

“The App Store has been an engine of success for app developers, in part because of the rigorous standards we have in place . . . to protect customers from malware and to prevent rampant data collection without their consent,” Apple said. “We look 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.”

The investigation comes after Brussels opened four antitrust probes into Apple. The European Commission is investigating whether Apple’s rules undermine rivals in gaming and cloud services.

Regulators in the EU also launched a competition probe into Apple Pay last summer. The Dutch competition authority began a similar examination of Apple’s app store rules in 2019 and is expected to report its conclusions soon. Meanwhile, the US Department of Justice has also been asking app makers about their dealings with Apple, though no case has been brought so far.

Apple in October warned investors for the first time that it faced a “material” financial risk from the regulatory pressure on its App Store.