On Friday, a UK competition appeals court overturned the antitrust regulator’s inquiry into Apple’s mobile browser and cloud gaming service.
Apple’s appeal was successful because the regulator violated statutory timeframes for such inquiries, opening the probe too late.
Last November, the Competition and Markets Authority (CMA) launched a Market Investigation Reference (MIR) into Apple’s iOS and Google’s Android mobile platforms.
The MIR judgment followed the CMA’s June 2021 mobile duopoly market investigation, which found competition problems in December 2021. But, the regulator did not act, likely anticipating additional powers to attack Big Tech from a “pro-competition” reboot the government had promised to undertake in the fall of 2020 after a 2019 competition policy review.
The CMA’s concern is the UK government didn’t follow this strategy. In May 2022, under Boris Johnson, it shelved the competition revamp, leaving the CMA’s Digital Markets Section without additional powers. It also left its prior decision to delay mobile market action in expectation of customized competition powers high and dry.
The CMA published the final result of its year-long mobile ecosystem research in June 2022, reaffirming its belief that Apple and Google’s market strength warrants regulatory involvement. In November, it revealed a deep dive into Apple’s mobile browser and cloud gaming, evidently trying to salvage a terrible situation.
Unfortunately, it was too late, and the Tribunal found that the CMA likely erred in law by seeking to re-visit a previous decision not to issue a referral.
“The CMA did not have the option to decide not to issue a referral at all with a reservation entitling it to re-visit that choice at its discretion later,” the Tribunal states in a 42-page opinion on where the regulator went wrong. As stated, the CMA’s decision not to refer is dubious under public law.
A CMA representative said it might 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.
The episode shows how political uncertainty in the UK has hindered new digital legislation and continues to affect the implementation of existing regulations that might have been used years earlier to reduce tech firms’ market dominance if regulators had clear instructions and commitment from politicians. Instead, crucial oversight authorities like the CMA have been left flapping in the wind atop a political morass while tech titans have had smoother sailing.
