Apple wins appeal over investigation into competition in the UK mobile market

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Good news for Apple in the UK, where an appeals court on Friday overturned a decision by the antitrust regulator to investigate the iPhone manufacturers’ mobile browser and cloud gaming service.

The Competition Appeals Tribunal (CAT) ruled that the regulator failed to comply with established legal deadlines for such investigations – in fact, it was too late to decide to open the investigation – and Apple’s appeal succeeded on this point of law.

The Competition and Markets Authority (CMA) announced last fall a formal investigation, known as a Market Investigation Reference (MIR), that focused on both Apple’s iOS and Google’s Android mobile platforms.

The MIR decision followed a market study of the mobile duopoly – which launched the CMA in June 2021 – and resulted in a provisional finding of competition concerns in December 2021. However, at that point the regulator decided not to take any action – apparently anticipating on new powers to tackle Big Tech as a result of a “pro-competition” reboot proposed by the government in late 2020, following a 2019 competition policy review.

The problem for the CMA is that the British government has not adhered to this plan. And in May 2022, under then Prime Minister Boris Johnson, it once again kicked the competition into the long grass – leaving the CMA’s Digital Markets Unit dangling without the expected new powers. Which, of course, also left its previous decision to take the heat to action over concerns about the mobile market in anticipation of bespoke competitive powers high and dry.

In June 2022, the CMA pushed for the release of a final report of what was then a year-long study of the mobile ecosystem, reaffirming its position that there are substantial concerns about Apple and Google’s market power, requiring regulatory intervention . And in November it announced an in-depth investigation of particularly concerning elements – including Apple’s mobile browser and cloud gaming – apparently to make the best of a bad situation.

By then, however, it was too late – and the Tribunal believes the CMA likely erred in law by attempting to reverse an earlier decision not to make a referral.

“The CMA did not have the option of deciding not to make a referral at all with a caveat giving it the right to review that decision at a later date in its sole discretion,” the Tribunal writes in a 42-page judgment on where it saw the regulator’s decision-making go awry. “The choice of the CMA – to make a final decision not to refer – is, as we said, questionable on public law grounds.”

Commenting in a statement, a CMA spokesperson suggested it could appeal – writing:

We are disappointed with today’s verdict. We have created this market research to ensure that UK consumers have a better choice of mobile internet services and UK developers can invest in innovative new apps. Our concerns and the reasons why we started our market research were not disputed by Apple.

Today’s ruling has revealed material limitations on the CMA’s overall ability to refer markets for in-depth investigation. This threatens to significantly undermine the CMA’s ability to efficiently and effectively investigate and intervene in markets where competition is not working well.

Given the importance of today’s ruling, we will consider our options, including seeking permission to appeal.

The saga underscores how the political chaos in the UK has not only undermined new policymaking in the digital arena, but continues to have knock-on implications for the enforcement of existing laws that would otherwise have been applied years earlier to curb the market power of tech giants – if regulators had had clear guidance and commitments from legislators to take action. Instead, critical oversight bodies like the CMA have continued to flutter in the wind atop a political quagmire and tech giants have enjoyed much more stable sailing.

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