New law may force Apple App Store to open up in UK

Once the dust has settled over the next UK election, Apple might be forced to open up its business there in the same way it is being opened up in Europe — thanks to the Digital Markets, Competition and Consumers Bill.

The measure, expected to become UK law later this year, aims to police digital markets, strengthen digital consumer law, control mergers, and set new standards of antitrust. Among other things, this wide-ranging legislation aims to put limits around the big tech firms to increase competition in digital markets. 

Apple is likely to be a target

When it comes to Apple, the new law brings in a new status similar to the EU’s “Gatekeeper” role.

The Strategic Market Status (SMS) regime gives the Competition and Markets Authority’s (CMA’s) Digital Markets Unit (DMU) power to designate firms as having SMS if they have “substantial and entrenched market power” and a “position of strategic significance” in relation to digital activities linked to the UK. SMS status will likely be given to Apple along with other major tech firms, including Google, Samsung, Microsoft, who all have market power and strategic significance. 

While this could be seen as a badge of honor, it also means the companies will have to follow a code of conduct created by the DMU. “The scope of permitted conduct requirements is incredibly broad, giving the DMU very wide discretion to decide what obligations should be imposed on each firm,” writes Linklaters.

They may also be given more stringent merger reporting requirements and could be subject to what are called Pro-Competitive Interventions (PCI’s). 

Forced to open up?

Apple could find itself hit with one or more of these PCIs that might bring the UK more in line with the EU in terms of opening up its platforms and services. This outcome is made more probable because the CMA has been investigating Apple for some time, arguing that, “Apple’s restrictions in particular are holding back potentially disruptive innovation that could transform the way that consumers access and experience content online.”

As previously reported, the three main strands of that investigation relate to:

• How control of the browser market affects developers.
• The insistence that browser developers use WebKit.
• Apple’s refusal to permit cloud gaming services/portals on the App store.

This case has been in and out of courts for a couple of years, but the CMA’s dogged pursuit of this action shows how seriously it intends on taking action.

Now armed with the new legislation, the CMA has more tools at its disposal with which to force Apple and other big tech firms to loosen their perceived grip on digital markets, including things like unbundling WebKit from browsers or opening up for sideloading on devices.

Protecting the core business

Apple’s actions in Europe since similar legislation came into effect shows the company is willing to make changes while working to preserve its business and protect consumer privacy and security. Ultimately, its core mission seems to be that of continuing to offer goods and services via an App Store designed to maintain the user experience and consumer trust that digital storefront has already created.

There is still a compelling argument to say that many consumers actually want a curated, safe, purchasing experience, rather than being exposed to a more complex web of competing stores, with varying commitments to the consumer experience.

However, the international regulatory consensus at this point — including the crazed US antitrust case — seems to be that Apple and other big tech firms must be forced to loosen their grip, the hope being that other competitors can grow in the space they leave behind.

There is some risk to the regulatory approach: In June 2023, Apple said the iOS app economy supports over 4.8 million jobs across the US and Europe. This might turn out to mean something should regulatory zeal dent Apple’s business in those places. 

For additional insight into the provisions of the new UK law, you can take a look at the Bill in full here, or explore legal firm Linklater’s commentary on the significance of the Bill here.

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