Apple’s App Store is being investigated by the UK competition watchdog over concerns about possible unfair practices that could ultimately mean consumers are paying higher prices.
The Competition and Markets Authority (CMA) said its probe into the iPhone and iPad maker was partly prompted by complaints from app developers.
Apple’s terms mean that developers can only distribute their apps on its devices via the App Store and some of them are required to use Apple Pay to charge for add-ons or upgrades.
Each time a consumer buys an app or makes one of these in-app purchases, Apple charges a commission of up to 30%.
Several developers reported that the company’s terms and conditions were unfair and could break competition law, the CMA said.
The watchdog’s chief executive Andrea Coscelli said: “Millions of us use apps every day to check the weather, play a game or order a takeaway.
“So, 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.”
The regulator will consider whether Apple has a “dominant position” in the business of distributing apps on its devices in the UK.
If so, it will investigate whether the company imposes unfair or anti-competitive terms on developers using the App Store “ultimately resulting in users having less choice or paying higher prices for apps and add-ons”.
The CMA said it was only the beginning of the investigation and no decision had yet been made on whether it was breaking the law.
Apple is already the subject of competition probes by the European Commission.
The company has also been locked in a dispute with Epic Games, maker of the popular game Fortnite, which last year tried to avoid the 30% commission by launching its own in-app payment system – prompting Apple to ban Fortnite from its store.
Apple said on Thursday that it would work with the regulator.
“The App Store has been an engine of success for app developers, in part because of the rigorous standards we have in place – applied fairly and equally to all developers – to protect customers from malware and to prevent rampant data collection without their consent,” the company said.
In January, Apple reported record quarterly sales of $11.4bn for the Christmas quarter of 2020, boosted by demand for the new iPhone 12 model.