Regulator investigates whether terms of app store break the law

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The UK’s competition watchdog has opened an investigation into whether Apple is breaking trading laws by forcing anti-competitive terms on developers that sell their programs via its App Store.

The Competition and Markets Authority said that the probe, the initial phase of which will run until September, was prompted by its own assessments of the digital industry, as well as by “several developers reporting that Apple’s terms and conditions are unfair and could break competition law”.

The CMA noted that the Apple-run App Store is the only way for users to access apps for use on the vendor’s devices, including iPhones and iPads. It added that all apps require approval by the smartphone maker and that developers selling their software through the App Store are required to use Apple’s own system to process payments for in-app features – at a cost of up to 30% commission paid to the vendor.

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The CMA’s investigation intends to determine whether Apple has a dominant position in the distribution of apps on its phones and tablets, and whether it uses this to impose “unfair or anti-competitive terms” that contravene the law. This, the regulator claimed, would mean that users ultimately end up paying more and suffering limited choice.

Andrea Coscelli, chief executive of the CMA 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 regulator launched a new Digital Markets Unit in November and pledged that its formation meant that “tech giants will be subject to a new regime” that would promote greater competition and give consumers more control over how their data is used.

“Our ongoing examination into digital markets has already uncovered some worrying trends,” Coscelli said. “We know that businesses, as well as consumers, may suffer real harm if anti-competitive practices by big tech go unchecked. 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.”

The regulator said that it would “coordinate closely” with counterparts in the European Commission, which is currently undertaking four antitrust investigations into Apple’s practices.