UK: Commission Lawsuit Ruling and Strategic Market Status
Apple abused its dominant position by charging app developers unfair commissions, a London tribunal ruled on Thursday, in a blow which could leave the U.S. tech company on the hook for hundreds of millions of pounds in damages.
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Thursday’s ruling comes after Apple was hit with a complaint to European antitrust regulators over the terms and conditions of its App Store under rules aimed at reining in Big Tech.
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Rachael Kent, the British academic who brought the case, argued Apple had made “exorbitant profits” by excluding all competition for the distribution of apps and in-app purchases.
The U.K.’s Competition and Markets Authority (CMA) said on Wednesday that it’s designating Apple and Google with strategic market status in their respective mobile platforms. The decision, which affects the companies’ operating systems, app stores, browsers, and browser engines, will enable the regulator to take targeted actions to enhance competition in the space.
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Among other findings, the CMA discovered that U.K. mobile device owners are unlikely to switch between Apple and Google’s mobile platforms once they have adopted the ecosystem of their choice. It noted that both platforms require businesses to distribute apps through their app stores to reach consumers.
Notably, it also said that new technologies, like AI, were “unlikely to eliminate Apple or Google’s market power over the five-year designation period.”
Pretty soon it may be easier to list the significant markets in which Apple is still able to exercise complete control over iOS app distribution.
Previously:
- Google Search Remedies
- UK App Store Commission Lawsuit
- UK CMA vs. Apple’s Browser Rules
- DMA Gatekeepers Designated
- UK Antitrust Lawsuit Over App Store Fees
- Apple Appeals UK CMA Decision
- Apple Responds to UK CMA Interim Report
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> the CMA discovered that U.K. mobile device owners are unlikely to switch between Apple and Google’s mobile platforms once they have adopted the ecosystem of their choice.
If it's the ecosystem of their choice, why would they switch? That's like saying that Mac users are unlikely to switch to Windows once they have adopted the platform of their choice. No kidding!
That's not to say there's no issues with how Apple is currently operating, just that this line is particularly bizarre and implies a wildly out-of-touch view with how devices like this function in ordinary consumers' lives.
> If it's the ecosystem of their choice, why would they switch? That's like saying that Mac users are unlikely to switch to Windows once they have adopted the platform of their choice. No kidding!
People change their minds. I switched from iOS to Android this year, and it was extremely painful. Apple works hard to lock you in. For example, you're going to have to switch smart watch at the same time as switching phone – Apple's self-preferencing makes it unreasonably difficult to compete with the Apple Watch since there's many things that are impossible, so you can't, say, switch your watch first and then phone later. Extracting Messages data from iCloud for transfer is opaque and error-prone. Health data has no standard export format.
Every little point of friction adds up to persuade most people to stay where they are (and, to be clear, Google does the reverse on the Android side). That's especially egregious if you're trapped on iOS, as it means you have little choice but to take whatever Apple makes next time you need to buy a phone. Apple should be competing on quality and price, not just selling to a captive audience.
