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Apple Probed by U.K. as App Store Payments Scrutiny Mounts

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Jonathan Browning and Aoife White
·2 min read
Apple Probed by U.K. as App Store Payments Scrutiny Mounts
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(Bloomberg) -- U.K. antitrust authorities opened a probe into Apple Inc’s app payment rules, adding to a slew of global probes examining the control the iPhone maker holds over app developers.

The Competition and Markets Authority said it will focus on how Apple forces customers to use its own payment system for in-app purchases and will weigh the company’s potentially “dominant” position in the supply of apps on iPhones and iPads.

“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 probe adds to growing U.S. and EU antitrust scrutiny of Apple’s rules that require apps to use its own in-app payment system. The EU is readying an escalation of its case, people with knowledge of the probe said on Thursday. Apple’s control of payments allows it to enforce a subscription fee of up to 30% for some subscription fees. The Dutch competition authority is also examining phone payments.

The investigation was partially prompted by concerns from developers, the CMA said. Epic Games Inc., the maker of the Fortnite battle game, is suing Apple in the U.S. and Australia over the issue and recently lost an attempt to pursue legal action against the Apple app stores at the U.K.’s antitrust tribunal.

The Apple probe comes as the U.K. 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 and has warned that the largest companies will face extra scrutiny of everything from mergers to monopoly behavior.

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 “shows the impact of Brexit,” said Damien Geradin, a lawyer representing some of the developers that filed 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.

(Updates with detail of EU escalation in fourth paragraph.)

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