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Apple's App Store is Now Under EU Antitrust Investigation (Again)

Apple's App Store is once again under scrutiny following complaints from software developers who allege unfair terms and anti-competitive behaviour

The U.K.’s competition regulator launched an antitrust investigation into Apple, UK’s Competition and Markets Authority (CMA) announced today (4/3/21) that they have opened an investigation following a number of complaints from software developers alleging unfair terms and as a result of its own work in the digital sector. The investigation aims to take a closer look at distributions, where app developers can only distribute their apps to iPhone and iPad users through the App Store, and yet can only receive approval to do so from Apple by agreeing to the company's stringent terms and conditions. Further, the investigation will examine whether it's fair that Apple forces paid in-app features, upgrades and add-ons to be paid for through its own Apple Pay payment system, where Apple charges developers up to 30% commission.

Apple only lets developers release iPhone and iPad apps through its iOS smartphone platform, they have a rigorous approval process for iOS apps and have previously faced criticism about a 30% fee it charges for developers on in-app transactions. “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,” the CMA stated in a press release. An apple spokesperson responded to the actions of the CMA;

"We 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. In the UK alone, the iOS app economy supports hundreds of thousands of jobs, and any developer with a great idea is able to reach Apple customers around the world."
"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."

Epic Games, home to the creators of the widely popular video game Fortnite, have been very vocal in its criticism of Apple, claiming that Apple's App Store rules are anti-competitive and has particularly taken issue with the 30% cut that Apple takes from developers for in-app purchases, calling it an 'unfair tax'. Epic Games have also recently sought to join the EU’s case by filing a complaint with the European Commission last month. US lawmakers have also been questioning Apple as part of a major antitrust probe into big tech, further, a bill has just advanced in Arizona with aims to force both Apple and Google to allow third party payment options in their smartphone stores, rather than the singular App Store owned route of payment.

Apple is now somewhat used to its App Store being the subject of scrutiny for antitrust investigations, the EU currently have 4 open investigations into Apple, three of which pertain to the App Store. Britain’s competition probe into Apple follows similar moves to that of the European Union, previously in 2020, the EU Commission launched antitrust investigations into Apple’s App Store rules and its Apple Pay mobile wallet and the CMA said it would continue to coordinate closely with the EU and other regulators, despite Britain having formally left the bloc last year. Following Brexit, the UK is undertaking a push to hold Big Tech to account, especially now that it no longer relies on the EU to perform monitoring duties. Although Apple may be the first in line for the big tech crackdown, the Digital Markets Unit was announced back in November 2020 and the CMA specifically said it would be keeping a close eye on Google and Facebook.

“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.” Andrea Coscelli, chief executive of the CMA said in a statement.

Many large U.S. tech companies are facing mounting antitrust scrutiny from regulators around the world, especially in the EU, who are looking to clamp down on Big Tech with sweeping digital markets and services reforms, but the UK have begun to put in place plans to introduce new digital rules. The probe has been prompted by a combination of complaints directly from developers including one in 2019 by music-streaming service Spotify, and the CMA's own ongoing examination of digital markets in the UK. This examination is likely to launch other antitrust investigations into tech companies where there are grounds to do so and also work to establish a new code for governing online platforms and how they operate with developers and users.

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