Today the United Kingdom’s Competition and Market Authority (CMA) launched an official investigation into the distribution of apps on iOS and iPadOS devices in the U.K. and the terms and conditions governing the platform.
In September of last year, the authority launched an initial inquiry into developers’ complaints about Apple’s App Store and so-called “anti-competitive” practices. CMA is now wrapping up its initial inquiry to launch an official investigation under Chapter II of the 1998 Competition Act.
Chapter II relates to a specific company or organization using its domain position within a particular market or industry to limit competition and further enhance its position. In recent months, developers, motivated mainly by Epic Games, have accused Apple of using its dominant position on its platforms and the platform to hinder competition.
The authority says that it has “reasonable grounds” to believe that Apple has broken competition law in some form under the Competition Act of 1998.
The CMA says that its investigation will determine whether or not 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.” Andrea Coseclli, the Chief Executive of CMA, says that as the world relies on apps every day, a complaint that Apple is using its position to limit competition and choice calls for “careful scrutiny.”
As part of its investigation, the CMA will probe into Apple’s 30% commission for in-app purchases. Apple requires developers to use its own App Store in-app purchasing system for purchases made within apps. As part of the system, Apple gets a 30% commission for any purchase made. Developers have voiced concern that the commission is too high, and as a result, Apple announced a lower 15% commission for qualifying, small-indie developers.
Update: Apple provided TechCrunch with the following statement regarding the CMA’s investigation:
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.