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Apple’s App Store controls spark U.K. antitrust investigation

March 4, 2021, 11:14 AM UTC

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The U.K.’s antitrust regulator has begun investigating Apple over its allegedly restrictive terms for app developers.

In many ways, the probe mirrors an EU investigation that began in June last year, which is looking into Apple’s contentious policy forcing developers to give it a 30% cut of in-app purchases and subscriptions. Apple halved that rate after the EU investigation began, though only for smaller iOS app developers.

However, the U.K.’s Competition and Markets Authority (CMA) is going a step further: It is also looking into complaints about the fundamental fact that Apple allows iPhone and iPad apps to be distributed only through its own iOS App Store.

The key question in this probe will be whether, because of these restrictions, Apple’s British customers end up having less choice and paying higher prices for apps and add-ons, the CMA said in a Thursday statement.

“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,” said CMA chief executive Andrea Coscelli.

The CMA said it continued to coordinate with EU’s antitrust authorities, “as well as other agencies, to tackle these global concerns.”

Apple responded by defending its ban on the distribution of iPhone and iPad apps outside the App Store, saying it 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.”

“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,” it said in an emailed statement.

Shares of Apple, which trade in Frankfurt, fell by more than 1% following the CMA’s announcement, though tech stocks have been generally suffering in recent days thanks to inflation-related market jitters.

Australia’s antitrust authority is also probing Apple’s dominance of app sales on its platform, along with Google’s dominance of sales on Android. It is expected to produce a report on the subject this month.

In the U.S., a Democratic-led House Judiciary subcommittee report last October said Apple had monopoly power over the distribution of iOS apps, alleging that it used this control to “create and enforce barriers to competition and discriminate against and exclude rivals while preferencing its own offerings.”