Britain's antitrust agency, the Competition and Markets Authority (CMA), will gain legal powers to allow it to impose billions of dollars in fines against Apple and other tech giants. This is apparently the second U-turn in the UK government's plans.
The CMA's powers will now go one step further than originally announced, allowing it to fine companies up to 5% of their daily global turnover...
As early as March 2021, the UK launched an antitrust investigation into Apple.
Britain's competition watchdog today announced plans to determine whether the App Store restricts competition. The government has announced that the Competition and Markets Authority (CMA) will conduct an investigation.
A second investigation followed, this time against Apple and Google. The conclusion is that Apple and Google do have too much power. In particular, Apple is able to impose any App Store terms and commissions on the company, since any developer who wants to sell iPhone apps can only go through Apple's channels.
This is a very worrying development for Apple, as the UK government said it would give the CMA the power to overturn the tech giant's policies and impose fines of up to 10% of its total global turnover. This is known as having statutory power: the ability to impose penalties directly without parliamentary involvement.
However, it was reported earlier this week that the government had shelved plans to grant the CMA statutory powers. That means the antitrust agency can recommend fines and other actions, but parliament must vote on those recommendations. The UK will be able to fine Apple and Google billions of dollars.
However, the government has now said the CMA will be given the promised powers. BBC reports:
“There are rumors that the Digital Markets Sector [part of the CMA] will not gain legal status and will therefore be less attractive. However, the government said it will introduce legislation “in due course” to bring the regulator into statutory status.
The DMU will have the power to clamp down on "predatory practices" by certain companies. The regulator will also have the power to fine companies up to 10% of their global turnover if they fail to comply. "
In fact, the government has now said the CMA will be able to levy higher fines than originally announced.
"Tech companies can be fined an additional 5% of their daily global turnover if violations continue for a day."
The ability to levy daily or weekly fines is a power used by other antitrust agencies around the world, such as the Dutch dating app case. However, the weekly maximum fine is $5 million, while the UK CMA will have no maximum fine.
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