Court of Appeal overturns CAT judgment in Apple v CMA

30/11/23

Today the Court of Appeal (Sir Julian Flaux, Chancellor of the High Court, Lord Justice Green and Lord Justice Arnold) allowed the CMA’s appeal against a judgment of the Competition Appeal Tribunal which had quashed the CMA’s decision to make a market investigation reference into the supply of mobile browsers and cloud gaming services.

The CMA carried out a 12-month market study in relation to the supply of Mobile Ecosystems such as smartphones and app stores. During that study the CMA decided not to make a market investigation reference, as it could have done, because the CMA anticipated that it would obtain new statutory powers in the near future which it envisaged using to address the competition problems that it had identified.  As events turned out, the anticipated legislation did not emerge. The proposed law, the Digital Markets, Competition and Consumers Bill, was included in the King’s Speech on 7 November 2023 and has not yet been enacted.

After the market study the CMA launched a market investigation into the distribution of mobile browsers and cloud gaming services on Apple iOS and Android mobile devices. 

Apple challenged the CMA’s decision.  The CAT allowed Apple’s appeal because it considered that the CMA’s decision did not comply with the statutory time limits for making references during a market study.  The CMA appealed because the CAT’s quashing order would terminate its market investigation and impede the CMA’s ability to investigate possible restrictions of competition affecting mobile devices in the UK.

The Court of Appeal agreed with the CMA, and held that it had lawfully exercised its standalone power to make a reference. The statutory time limits for making references during a market study do not impose any wider limit on the CMA’s power to make a fresh reference outside of a market study.  In adopting a purposive interpretation of the relevant legislation, Green LJ emphasised that “whilst protection of investigated undertakings from undue investigatory burdens is a relevant consideration, the principal purpose of the Act is to promote competition and protect consumers.”

The judgment can be found here.