Shares of Apple Inc. (NASDAQ: AAPL) drops in pre trading session in the start of week as a competition appeals court in the UK on Friday overturned the antitrust regulator’s decision to launch an inquiry into the mobile browser and cloud gaming service offered by Apple Inc. (NASDAQ: AAPL), which is good news for the company.
Apple’s appeal was successful on this legal issue when the Competition Appeals Tribunal (CAT) found that the regulator did not adhere to the established statutory timelines for such investigations essentially, it was too late to decide to launch the probe.
A formal inquiry of both Apple’s iOS and Google’s Android mobile platforms, known as a Market Investigation Reference (MIR), was announced by the Competition and Markets Authority (CMA) last October.
The mobile duopoly market analysis that the CMA began in June 2021 and that resulted in a preliminary finding of competition concerns back in December 2021 led to the MIR decision. The regulator, however, refrained from acting at the time, ostensibly anticipating additional authority to deal with Big Tech as a result of a “pro-competition” reboot the government had said it would put into place in autumn 2020 following a 2019 competition policy review.
The UK government’s failure to adhere to this strategy is the CMA’s issue. Moreover, it put off the competition reboot in May 2022 under the then-prime minister Boris Johnson, leaving the CMA’s Digital Markets Unit without the anticipated additional authority. This obviously left its prior decision to put off taking action due to worries about the mobile market in anticipation of specialized competition powers high and dry.
The CMA persisted in publishing the final report of the then-year-long mobile ecosystem research in June 2022, reiterating its position that there are serious issues about the market dominance of Apple and Google that necessitate regulatory involvement. Also, in an apparent attempt to save some face, it said in November that it was doing a thorough examination into several factors that were of special concern, such as Apple’s mobile browser and cloud gaming.
The CMA attempted to revisit an earlier decision not to make a reference, but by that point it was already too late and, according to the Tribunal, this was probably a legal error.
The Tribunal states in a 42-page opinion on where it believed the regulator’s decision-making went wrong: “The CMA did not have the option to elect not to issue a referral at all with a reservation entitling it to re-visit that decision at its discretion at a later date.” As we previously stated, “The CMA’s decision to make a final judgment not to refer is dubious on public law grounds.”
