Apple wins appeal over UK mobile market competition probe

Good news for Apple in the UK where a competition appeals court on Friday quashed a decision by the antitrust regulator to open an investigation of the iPhone makers’ mobile browser and cloud gaming service.

The Competition Appeals Tribunal (CAT) ruled the regulator failed to stick to established statutory timeframes for such investigations — basically, it was too late in deciding to open the probe — with Apple’s appeal succeeding on this point of law.

The Competition and Markets Authority (CMA) announced a formal investigation — aka a Market Investigation Reference (MIR) — last fall, which was focused on both Apple’s iOS and Google’s Android mobile platform.

The MIR decision followed a market study of the mobile duopoly — which the CMA kicked off in June 2021 — and resulted in a preliminary finding of competition concerns, back in December 2021. However, at that time, the regulator decided against taking any action — apparently anticipating new powers to tackle Big Tech as a result of a “pro-competition” reboot the government had suggested it would implement, back in fall 2020, following a 2019 competition policy review.

The problem for the CMA is the UK government failed to stick to this plan. And, in May 2022, under then prime minister Boris Johnson, it kicked the competition reboot into the long grass — leaving the CMA’s Digital Markets Unit dangling without the expected new powers. Which also of course left its earlier decision to hang fire on taking action over mobile market concerns in anticipation of bespoke competition powers high and dry.

In June 2022, the CMA pressed on to publish a final report of what was then a year-long mobile ecosystem study cementing its view that there are substantial concerns about the market power of Apple and Google which require regulatory intervention. And in November it announced an in-depth investigation of elements of particular concern — including Apple’s mobile browser and cloud gaming — apparently seeking to make the best of a bad situation.

However, by then it was too late — and, per the Tribunal, the CMA likely erred in law by attempting to re-visit an earlier decision not to make a reference.

“The CMA did not have the option to decide not to make a reference at all with a reservation entitling it to re-visit that decision at its discretion at a later date,” the Tribunal writes in a 42-page judgement on where it saw the regulator’s decision-making go wrong. “The choice made by the CMA — to make a final decision not to refer — is, as we have said, questionable on public law grounds.”

Commenting in a statement, a CMA spokesperson suggested it may seek to appeal — writing:

We are disappointed with today’s judgment. 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.

Today’s judgment has found there are material constraints on the CMA’s general ability to refer markets for in-depth investigations. This risks substantially undermining 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 judgment, we will be considering our options including seeking permission to appeal.

Update: An Apple spokesperson said:

The saga underlines how 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 might otherwise have been applied, years earlier, to curb the market power of tech giants — if regulators had had clear guidance and commitment from lawmakers to take action. Instead critical oversight bodies like the CMA have been left flapping in the wind atop a political quagmire and it’s tech giants who’ve enjoyed much steadier sailing.