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Apple appeals UK probe, but is it just buying time?

January 21, 2023

Apple has filed an appeal against the UK competition watchdog’s decision to launch an investigation against it and Google into their dominance of mobile services.

Apple has appeal

The iPhone maker’s legal team argues that the probe should be reviewed, arguiing it missed timing requirements to launch an investigation, Reuters explains. Then UK Competition and Markets Authority (CMA) will continue to look into the matter while defending its decision.

The CMA argues that the investigation aims to give UK consumers more choice while providing developers with more opportunity to innovate. It also notes that 97% of all UK mobile web browsing relies on either Apple’s or Google’s browser engines.

What issues are being investigated?

The CMA announced plans to launch an investigation in November. There are three primary strands that affect Apple:

One involves the impact of control of the browser market on developers.
Another involves Apple’s insistence that browsers on its platform use its own WebKit browsing technology. In its November announcement, the CMA warned this may hold back “potentially disruptive innovation.”
And the CMA is also looking at Apple’s refusal to permit cloud gaming services on the App store.

“We plan to investigate whether the concerns we have heard are justified and, if so, identify steps to improve competition and innovation in these sectors,” Sarah Cardell, the CMA interim CEO, said announcing the investigation.

What is the effect of the appeal?

Apple’s appeal of the investigation may or may not succeed, but it seems plausible — given the nature of UK law — that the investigation could be slowed. Ultimately the CMA aims to finish its investigation by or before early summer 2024.

If the agency finds against Apple (or Google) it could impose remedies that include insisting browsers be able to use rendering engines other than WebKit or mandating inclusion of cloud games services within the App Store.

What can Apple do?

Apple may have plans to get ahead of the UK regulator and lawmakers in other nations who are exploring similar complaints. A December report indicated the company has a high-powered team exploring changes that might bring its business more in line with such criticisms.

Among other changes, the report cited support for third-party payment systems, external app stores, and the possible use of browser engines other than WebKit. These changes would surely blunt the accusations that prompted the CMA investigation.

Not only that, but if applied effectively they could have little impact on Apple’s App Store business, according to Morgan Stanley. “Apple’s customers have long prioritized the security, centralization, and convenience that the App Store brings,” said Apple analyst Erik Woodring.

Will they or won’t they?

No one outside a few white walled halls in Cupertino knows the extent (if any) to which Apple intends making any such changes to its platforms. At the same time, it is reasonable to imagine such changes would require it to invest a hefty slice of energy to put them in place.

This calls to mind another claim that Apple’s next iOS iteration will be slightly limited in scope as internal development resources are being focused on the looming AR goggles project.

Is it not also possible the company is putting contingency plans in place in case regulators insist on it making changes to its business practices? It will, after all, want to ensure business continuity, and it seems shrewd to pre-empt the negative PR of an adverse regulatory judgement by making changes before being forced to.

The best place to announce them would, of course, be WWDC (this year, or next) when the whole world will be watching, in person and online.

Are you going to (stream) San Francisco?

This won’t be the only reason to focus on WWDC 2023. Not only is it likely to be a stage for further information concerning Apple’s AR devices, but it now seems plausible to anticipate fundamental changes on a platform scale.

After all, perhaps Apple’s appeal today is designed to buy time to help put such changes into effect. The urgency of doing so continues to build. Only this week we learned the company in Brazil faces a fresh investigation into alleged anticompetitive business practices.