Technology
Apple probed over ‘unfair’ App Store by UK competition watchdog after complaints
APPLE is being probed by the UK competition watchdog over alleged “anti-competitive behaviour”.
The iPhone maker’s App Store terms will be investigated to find out if Apple has broken UK laws.
The Apple App Store is being investigated by the CMA[/caption]
A number of developers have allegedly complained to the Competition and Markets Authority.
These aggrieved app-makers have said that Apple’s terms and conditions are “unfair and anti-competitive”.
“Millions of us use apps every day to check the weather, play a game or order a takeaway,” said the CMA chief Andrea Coscelli.
“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.”
An Apple statement in response to the probe reads: “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.
The App Store is the only legitimate way to acquire iPhone apps[/caption]
“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.”
The App Store is the only legitimate way to download and install apps on an iPhone.
All apps available through the App Store have to be approved by Apple.
This has benefits: apps on the App Store are typically safer and higher quality than third-party stores.
In fact, cyber-experts often warn against downloading apps from third-party stores on iPhone and Android.
To get an app on the App Store, its creators must agree to Apple’s own terms.
But if developers can’t meet those terms, they’re not just shut out of the App Store but iPhone and iPad as a whole.
Developers have also complained that Apple takes a 30% cut of any money made through app sales or in-app transactions.
Fortnite maker Epic Games has been waging a largely unsuccessful war against Apple over this 30% cut.
This row has even led to Fortnite being totally removed from the App Store.
Fortnite was removed from the App Store last year for trying to dodge Apple’s fee[/caption]
Ultimately, the CMA is going to work out whether Apple has a “dominant position” in terms of distributing apps on its devices in the UK.
And also whether Apple is imposing “unfair or anti-competitive” terms on developers using the App Store.
The CMA is a consumer-focused organisation, so much work will be done to discover if iPhone owners are paying higher prices for apps as a result of Apple’s rules.
“Our ongoing examination into digital markets has already uncovered some worrying trends,” said Coscelli.
“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.”
In response to the CMA probe, Apple said:”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.”
Apple recently slashed its 30% commission by half for smaller developers.
From January 1 this year, anyone who earns less than a $1million from the App Store in a given year will be eligible to pay the lower 15% fee.
It’s estimated that Apple facilitated around $519billion in commerce globally with the App Store last year.
And approximately 15% of that counted as eligible payments that Apple could take its 30% cut of.
The remaining 85% was spending on things like advertising or physical goods, which Apple doesn’t take commission on.
Apple says the majority of its 28million developers will be able to take advantage of the new App Store Small Business Program.
We’ve asked Apple for comment and will update this story with any response.
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