UPDATED 13:05 EDT / MARCH 04 2021

POLICY

UK launches investigation of Apple’s App Store as EU said to ready antitrust charges

The U.K.’s antitrust regulator has opened a probe to determine if Apple Inc. is imposing unfair terms of service on developers using its App Store.

The move was announced this morning, only hours before reports emerged that the European Commission is preparing to press antitrust charges against Apple. The charges are said to relate to the App Store as well.

In its announcement of the investigation today, the U.K.’s Competition and Markets Authority said it has received complaints from developers over some of the App Store’s terms of service. One condition the regulator plans to investigate is Apple’s requirement that iOS apps be distributed exclusively through its marketplace. The probe will also look into a policy that mandates developers process in-app transactions only via Apple’s payment system, which takes an up to 30% commission.

Officials will seek to determine if the conditions imposed by the iPhone maker on developers are unfair or anticompetitive. More specifically, the goal is to uncover whether or not those terms have the ultimate effect of raising app and in-app purchase prices for U.K. consumers. The probe will also look into the possibility that Apple’s policies reduce buying choices.

“Millions of us use apps every day to check the weather, play a game or order a takeaway,” said Competition and Markets Authority Chief Executive Andrea Coscelli in a statement. “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 probe focuses on many of the same issues as the antitrust charges the European Commission is said to be investigating. The Financial Times and Reuters separately reported the news today.

According to the Financial Times, the European Commission will accuse Apple of using the App Store to impose unfair restrictions on third-party music streaming apps that it doesn’t apply to its own Apple Music service. The main issue is Apple’s 30% fee on in-app purchases. To avoid a hit to their revenues, some developers have opted to pass the fee to their customers or disable in-app purchases and direct users to other payment methods. Regulators reportedly suspect that the phenomenon is inflating prices and reducing consumer choice. 

One developer in particular that has taken issue with Apple’s policies is Spotify Technology SA. The music streaming giant filed a regulatory complaint against the iPhone maker in 2019 over its App Store policies, accusing it at the time of “essentially acting as both a player and referee.” Spotify’s complaint was one of the key factors that led the European Commission to launch the probe. 

Officials have reportedly stopped sending Spotify questions in recent days, which is seen as a sign that they’re moving forward with the case. The Financial Times’ sources expect the antitrust changes against Apple to be formally filed within months. However, they cautioned that there’s still a possibility officials will decide against proceeding with the case. 

Photo: Andrew/Flickr

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