Apple faces UK antitrust investigation into App Store

UK antitrust authorities opened a probe into Apple Inc. and its App Store to examine whether the iPhone maker is abusing its market power by insisting on its own payment system to restrict competition.

The investigation into Apple's App Store was partially prompted by concerns from developers. (HT Tech)

UK antitrust authorities opened a probe into Apple Inc. and its App Store to examine whether the iPhone maker is abusing its market power by insisting on its own payment system to restrict competition.

The Competition and Markets Authority will consider Apple's potentially “dominant” position in the supply of apps on iPhones and iPads, it said in a statement on Thursday. The probe will focus on how Apple forces customers to use its own payment system for in-app purchases, the CMA said.

“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,” said Andrea Coscelli, who leads the CMA.

The Apple probe comes as the UK watchdog seeks to move to the forefront of tech regulation after emerging from the shadow of European Union regulators at the end of Britain's Brexit transition. It is preparing to set up a tech-focused unit next month and has warned that the largest companies will face extra scrutiny of everything from mergers to monopoly behaviour.

Apple said in a statement that it looks forward to working with the CMA to “to explain how our guidelines for privacy, security and content have made the App Store a trusted marketplace for both consumers and developers.”

The investigation was partially prompted by concerns from developers, the CMA said. Epic Games Inc., the maker of the Fortnite battle game, has previously complained that Apple removed its app after it tried to circumvent its app-purchase payment system.

”This investigation shows the impact of Brexit,” said Damien Geradin, a lawyer representing some of the developers who made complaints. “It gives a lot of freedom to the CMA, which now doesn't need authorization” from the EU, he said.

Geradin said that while the CMA probe was likely to focus on in-app purchases, the regulators may broaden the scope to consider issues such as why Apple only allows one app store on its devices.

Apple's position as a gatekeeper for what apps can appear on iPhones or iPads has already attracted EU antitrust scrutiny. It currently faces three separate investigations by the European Commission into its app store.