The European Commission, the legislative enforcement and policy implementation arm of the European Union (“EU”), has initiated an anti-competition (anti-trust) investigation to assess whether Apple’s conduct violates EU competition rules. The investigation will focus primarily on: (1) Apple’s terms and conditions regarding Apple Pay technology, which restrict its use to Apple devices; and (2) Apple’s 30% commission on charged apps or for in-app purchases for free apps, on the Apple platform.
Those who oppose Apple’s allegedly anti-competitive practices have argued that the requirements imposed by Apple make it difficult for small companies and developers to enter the market. One vocal critic of these practices, and direct Apple competitor, Microsoft, has called for wider investigations, including a Canadian assessment of whether Apple’s conduct has breached competition laws, and for greater anti-competition scrutiny of digital platforms more generally.
According to a statement made by their Vice President of Worldwide Marketing, Apple is not currently considering any changes to their allegedly anti-competitive App Store rules.
The EU investigation calls into question whether consumers of Apple products are paying more because of these allegedly anti-competitive practices. Anti-competitive behaviour, including “price-fixing,” can have wide-reaching implications, for both direct consumers (companies and developers who enter the market) and indirect consumers (people who purchase apps at artificially inflated prices as a result of anti-competitive practices).
If Apple’s practices violate Canadian competition laws, there may be some legal recourse for consumers who have been over-charged, including a potential class action against Apple. In Canada, the Competition Act enables consumers to bring a legal action to recover compensation for losses suffered as a result of anti-competitive conduct. To be successful, a consumer or class of consumers must prove that they have suffered actual (rather than speculative or hypothetical) loss as a result of anti-competitive behaviour, and must further prove that they were over-charged by the company against whom they have brought a legal action.
Fortunately for Canadian consumers, there is a relatively low threshold for certifying class actions in the context of anti-competitive behaviour. This is the first step in any Canadian class proceeding, and it requires a court to “certify” a proposed class of individuals, such that portions of their legal claims can be determined together to conserve resources and leverage efficiencies of scale.
Many questions remain unanswered as the EU investigation into Apple’s allegedly anti-competitive behaviour continues to unfold. Beyond the broad, systemic issues that are being investigated, many consumers may now have cause to wonder whether they were over-charged for their most recent purchase in the App Store.