Why UK watchdog abandoned its Apple monopoly probe
You win this round, Cook – but Europe has already lined up changes Britain fluffed
Analysis The UK Competition and Markets Authority (CMA) was forced to abandon its inquiry into Apple's role in the mobile browsing and cloud gaming markets because the agency missed its filing deadlines.
Apple requires all browsers that run on its iOS platform to use its WebKit rendering engine. Doing so prevents significant browser differentiation on iOS devices and restricts web developers to the capabilities Apple makes available. The iGiant also places limits on cloud gaming services, steering payments through its own payment system and putting rivals at a disadvantage.
The CMA has investigated the effect of those policies, as they limit UK consumer choice and may harm innovation, according to the regulator.
On Friday, the UK Competition Appeal Tribunal (CAT) – which, as its name suggests, handles competition cases – granted Apple's application to nix the CMA's antitrust investigation because the agency exceeded its authority.
On June 15, 2021, the CMA published a market study notice signalling its scrutiny of the mobile browser and gaming markets in the UK. But on December 14, 2021, the competition watchdog published a decision stating it would not launch a formal market investigation.
That same day it issued an interim report linked to its market study. The final version of the report arrived on June 10, 2022 and revealed the CMA had decided to consult on a possible market investigation related to mobile browsers and mobile game engines, and to probe cloud gaming service availability within app stores.
That consultation led to the CMA's November 22, 2022 decision to launch a formal investigation into Apple's practices.
Citing the time limits stipulated in the UK's 2002 Enterprise Act, Apple argued that the CMA failed to respect the deadlines required under the law, based on its own claim that the initial 2021 market study was related to the later 2022 study.
The law, under the scenario advanced by Apple, requires that the CMA's June 15, 2021 market study notice be followed by a proposed investigation notice within six months – not a year later, on June 10, 2022, when the notice was actually published. Similarly, the law also requires the CMA to begin its consultation within six months rather than a year.
The CMA argued that its aborted 2021 study and its subsequent 2022 inquiry were unrelated. But CAT – the appeals body – sided with Apple and ruled that the CMA had missed the boat.
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"We are disappointed with today’s judgment," a CMA spokesperson said in a statement. "We made this market investigation reference to make sure that UK consumers get a better choice of mobile internet services and that UK developers can invest in innovative new apps. Our concerns, and the reasons why we launched our market investigation, were not challenged by Apple."
The watchdog agency argued that the court's decision means there are limits to the CMA's ability to conduct in-depth investigations – and this substantially undermines the agency's ability to address competitive harms.
"Given the importance of today’s judgment, we will be considering our options including seeking permission to appeal," the CMA's spokesperson said.
Even if the CMA decides not to appeal, Apple still has to comply with the European Union's Digital Markets Act [DMA], which requires it to allow third-party browser engines and third-party in-app payment mechanisms in its App Store no later than March 2024.
The specific language reads:
The gatekeeper shall not require end users to use, or business users to use, to offer, or to interoperate with, an identification service, a web browser engine or a payment service, or technical services that support the provision of payment services, such as payment systems for in-app purchases, of that gatekeeper in the context of services provided by the business users using that gatekeeper's core platform services.
So that's all very clear. What it means is that the EU already has laws in place to force Apple (and anyone else with a mobile application platform and app store) to open those up to interoperate with third-party services. Even without the UK investigation, its concerns are more than likely being dealt with. Check and mate, Tim.
Absent a legal challenge to the DMA, Apple – the "gatekeeper" in the DMA language – may reveal some of the software infrastructure and policy changes necessary to accommodate the EU rules at its 2023 Worldwide Developer Conference, which begins June 5. ®