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Apple faces App Store investigation by UK competition authorities

App store revenues 2019
(Image credit: Future)

The UK’s competition watchdog has launched an antitrust investigation to determine whether Apple’s App Store practices are anti-competitive, harming both developers and consumers.

The Competitions and Markets Authority (CMA) says its probe has prompted by its own enquiries into the digital sector and as the result of complaints from several developers who object to what they believe to be restrictive terms and conditions.

Since its launch in 2008, the App Store has been the only way for developers to distribute software on the iPhone and iPad and to be listed, developers must submit their applications to Apple for review and agree to its terms.

Apple App Store investigation

This approval system means Apple ultimately has the final say over which applications can be used on iOS, while developers are obliged to pay 30% commission on the sales of apps and add-ons such as in-game currency or subscriptions.

This situation contrasts with the one on Google’s Android platform which permits third-party marketplaces to compete with Google Play.

Several developers have objected to Apple’s terms but have no other option if they want to reach iPhone and iPad users. Fortnite has been unavailable on the App Store since late last year after Epic Games tried to bypass Apple’s in-app purchase system and the two companies are now engaged in a legal battle.  

The CMA will now look to see whether Apple does indeed have a dominant position or imposes “unfair or anti-competitive” terms that ultimately leaves consumers with less choice and lower prices.  At this stage, no decision has been made as to whether the company has broken UK competition.

“Millions of us use apps every day to check the weather, play a game or order a takeaway,” said Andrea Coscelli, CMA chief executive. “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.

“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. 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 European Commission has also launched four antitrust investigations into Apple, three of which concern the App Store. The CMA says it will work with the EC and other agencies.

Apple has been contacted for comment.

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.