Apple faces UK investigation for suspected anti-competitive behaviour

The UK's Competition and Markets Authority (CMA) said Thursday it has launched an investigation into Apple (AAPL) following complaints that its terms and conditions for app developers are "unfair and anti-competitive."

Apple has globally come under fire many times for requiring that developers use its in-app purchase system when building apps for its platform and pay Apple a 30% commission for all sales.

In response to this Apple had announced a new programme last year reducing App Store commission to 15% for small businesses earning up to $1m ($718m) per year.

Noting that the App Store is the only way for developers to distribute third-party apps on Apple’s iPhones and iPads, the CMA said its investigation will consider whether Apple has a dominant position in connection with the distribution of apps on Apple devices in the UK.

If so, it will look at 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 regulator said the probe was prompted by its own work in the digital sector, as well as several developers reporting that Apple’s terms and conditions are unfair and could break competition law.

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Andrea Coscelli, CMA's chief, 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."

He said that the regulator's wider 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," he added.

In a statement to Yahoo Finance, an Apple spokesperson said: "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.

"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."

Last year the government had said it would set up a Digital Markets Unit to oversee a pro-competition regime for platforms including those funded by digital advertising, such as Google (GOOGL) and Facebook (FB).

Meanwhile, the European Commission currently has four open antitrust investigations into Apple, including three into App Store. The CMA said it is working closely with the EC, as well as other agencies, to tackle these concerns.

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