The UK’s Competition and Markets Authority (CMA) has launched a probe into whether Apple’s App Store terms are anti-competitive, becoming the latest regulator to investigate the tech behemoth.
The probe will establish whether Apple’s 30% commission to developers on in-app purchases as well as if the terms and conditions break competition laws. Among other issues, the CMA will also investigate concerns raised by third-party developers about them being forced to use Apple’s payment systems for their in-app offers, add-ons and upgrades.
It will also consider whether $2tn valued Apple has a dominant market position in the app ecosystem and whether this leads to consumers having less choice or paying higher prices.
The CMA announced the investigation on Thursday as part of its broader look into the digital sector and because of complaints by developers that Apple’s rules were “unfair”.
“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.”
In response to the CMA’s probe, Apple said: “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.
“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 for both consumers and developers.”
Apple’s App Store terms made headlines last August when Epic Games, maker of hit battle royale game Fortnite, bypassed Apple’s payment system to sell its in-game purchases.
Apple responded by pulling Fortnite from its App Store and in what appeared to be a premeditated and calculated PR move Epic Games filed an antitrust lawsuit minutes later, making an appeal to players via an in-game video that parodied Apple’s 1984 commercial.
Music streaming service Spotify separately sued Apple over its App Store terms in 2019.
In November 2020 Apple offered an olive branch to smaller software developers by halving the commission fees it charges.
The iPhone maker also faces a barrage of antitrust complaints in Europe, with the European Commission currently pursuing four open antitrust probes.
Apple is not alone in that regard as European commissioner for competition Margrethe Vestager has famously become a thorn in the side for Silicon Valley giants, having spearheaded a smattering of legal challenges over the years against other big tech businesses such as Google, Facebook and Amazon as well as Apple.
The CMA said it would work closely with the European Commission in its Apple investigation to “tackle these global concerns”.
The company is also under the microscope in the US, where it faces a number of lawsuits and investigations.
In November 2020 the CMA created a Digital Markets Unit with the goal of establishing new regulations for the tech industry. Its scope is likely to include tech giants such as Facebook and Google.
“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,” said the CMA’s Coscelli.
“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.”