This has been a good week for Apple Legal. It previously won its decade-long case against Virtnetx and this afternoon quietly prevailed in its appeal against the UK Antitrust Authority to investigate its mobile browser and cloud gaming services.
Apparently they thought it was wrong
The UK’s Competition and Markets Authority (CMA) announced in November last year its intention to probe Apple and Google for their dominance in mobile services.
Apple appealed the decision, arguing that the CMA failed to meet statutory time limits for such an investigation.
That appeal went to a court, which agreed today that the time limits had been exceeded, meaning the investigation was invalid and “must be overturned”.
One of the major issues that prompted the tribunal to make this decision was an earlier conclusion by the CMA in December 2021 not to probe the market. The CMA then released an interim report for the market that same day, followed by a second final report on June 22nd.
Apple made several arguments about both the timing and content of these reports, noting that some information was partially repeated and the decision was confused. In addition, the CMA failed to comply with legal obligations regarding the timing of an investigation. While I thought the company might be playing for time if it increased its appeal, it appears to have been confirmed to have succeeded.
The court writes:
“It just so happens that the CMA has followed these processes diligently and decided not to comment on a market investigation. This is the content of the previous decision and the previous decision is the explanation for the “non-compliance” of the managing authority. The fact is that the provisions of the Companies Act provide a clear code under which the CMA makes a decision either (i) not to make a reference to a market investigation or (ii) to consult on a proposal for such a reference or not to make any reference to take. The CMA chose option (i) rather than option (ii).”
As a result, the decision to open an investigation cannot stand and Apple’s appeal was successful.
Will Apple be ahead of the curve?
I’m no lawyer, but the decision could also hamper further investigations into Apple’s wireless business, at least for a while.
The court wrote:
“The consequence is not only that the application is successful and that the decision must be overturned as ultra vires by the CMA, but that the CMA cannot make any further or new decision to present a market investigation on the facts as we understand them ‘ said the court.
The tribunal also seems to be saying (as I understand in layman’s terms) that part of the reason the CMA made an earlier decision not to open an investigation was in anticipation of gaining more powers over digital markets in the future.
“Questionable for public law reasons”
“The essential point is this. The CMA, in accordance with its legal obligations, must consider the proper exercise of its powers and exercise those powers accordingly. To conclude that the criterion for submitting a market investigation reference under Section 131(1) was met, but refusing such a reference only in anticipation of obtaining further powers or on the basis of a preliminary and (as it turned out ) Error Given the potential for interference, it could well be said that the CMA made an error of law and/or took into account irrelevant considerations, such as future powers it might have. It could also be said that the CMA failed to consider the importance of a proposed market research reference. In fact, the CMA had a limited number of legal options to choose from (essentially, and broadly speaking, propose a reference; choose not to create a reference). The CMA did not have the opportunity to choose not to make any reference at all with a caveat entitling it to revisit that decision at a later date in its sole discretion. The decision taken by the CMA to make a final decision not to provide a submission is, as said, questionable on public policy grounds.”
Given that there’s a small chance Apple could debunk some of the arguments regulators are making against its business practices with a handful of changes announced at WWDC, the company could sidestep this particular scrutiny.
Anyway, it looks like they’re cracking down on the spumante at Apple UK. At least for now.
The resolution comprises 42 pages and can be accessed here.
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