Apple wins appeal vs. UK regulatory probe into mobile biz

This was the scene at the O2 store when the first iPhone was sold in the UK way back in November 2007.

This has been a good week for Apple legal. Earlier it won its decade-long case against Virtnetx, and quietly this afternoon prevailed in its appeal against the UK anti-trust regulator to investigate its mobile browser and cloud gaming services.

They held it wrong, apparently

The UK Competition and Markets Authority (CMA) announced its intention to investigate Apple and Google regarding their dominance of mobile services in November last year.

Apple appealed against the decision arguing that the CMA had failed to stay within statutory time limits for an investigation of this kind.

That appeal went to a tribunal which today agreed that the time limits had been exceeded, which mean the investigation was invalid and “must be quashed”.

One of the big issues that caused the tribunal to reach this decision was an earlier December 2021 conclusion by the CMA not to investigate the market. The CMA then published an interim report into the market on the same day, following this in June 22 with a second final report.

Apple made multiple arguments concerning both the timing and content within these reports, pointing out that to some extent some information was repeated, and the decision confused. Not only this, but the CMA failed to meet statutory obligations around timing for an investigation. While I thought the company may be playing for time when it mounted its appeal, it does appear to have been vindicated in making it.

The tribunal writes:

“It is simply that the CMA conscientiously followed those processes and reached a decision not to consult about making a market investigation reference. That is the substance of the Earlier Decision, and the Earlier Decision is the explanation for the MA’s “failures” to comply. The fact of the matter is that the provisions in the Enterprise Act constitute a clear code which involves the CMA making a decision either (i) not to make a market investigation reference or (ii) to consult upon a proposal to make such a reference or not to make a reference. The CMA chose option (i) and not option (ii).”

The impact of this is that the decision to launch an investigation cannot stand and Apple’s appeal succeeded.

Will Apple get ahead of the curve?

I am not a lawyer, but the decision may also hinder further investigation into Apple’s mobile business, at least for a while.

The tribunal wrote:

“The consequence is not only that the Application succeeds, and that the Decision must be quashed as ultra vires the CMA, but that the CMA cannot, on the facts as we understand them, make a further or fresh decision to make a market investigation reference,” the tribunal said.

The tribunal also seems to say (to my layman’s understanding), that part of the reason the CMA made an earlier decision not to launch an investigation was in expectation of acquiring further powers over digital markets in future.

‘Questionable on public law grounds’

They wrote:

“The essential point is this. The CMA, pursuant to its statutory duties, must consider the proper exercise of its powers, and must exercise those powers accordingly. In concluding that the test for making a market investigation reference under section 131(1) was met, but in declining to make such a reference only in the expectation of receiving further powers or on the basis of a preliminary and (as it transpired) mistaken view of the potential for intervention, it might well be said that the CMA erred in law and/or took into account immaterial considerations, such as future powers that might potentially accrue to it. It might also be said that the CMA failed to consider the importance of a proposed market investigation reference. The fact is that the CMA had a limited number of statutory options to choose from (essentially, and in broad brush terms, propose making a reference; decide not to make a reference). The CMA did not have the option to decide not to make a reference at all with a reservation entitling it to re-visit that decision at its discretion at a later date. The choice made by the CMA – to make a final decision not to refer – is, as we have said, questionable on public law grounds.”

Given that there’s a sliver of a chance Apple may choose to dent some of the arguments regulators are making against its business practises with a handful of changes to be announced at WWDC, the company may manage to dance around this particular investigation.

Anyway, it looks like they’ll be popping open the Spumante at Apple UK. At least for now.

The decision extends to 42-pages and is available here.

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