The Chinese government is contemplating the initiation of an antitrust investigation into Apple’s App Store commission structure, similar to those enacted in the US, EU, and other regions.
Nonetheless, it seems probable that this consideration is being utilized as a negotiating tool in the ongoing trade conflict sparked by the previous Trump administration…
Antitrust Actions Worldwide
Apple has confronted antitrust scrutiny and legal challenges globally, instigated by a combination of legislative actions and lawsuits from both consumers and app developers. The fundamental assertion is that Apple maintains monopolistic control over iPhone app sales, granting it the ability to dictate its own commission rates, leaving developers with no alternative but to comply.
The most significant alteration occurred in the EU, where the Digital Markets Act mandated that Apple permit the sale of iPhone and iPad applications through third-party app stores. Apple attempted to render this alternative as unattractive as possible for developers, which has been referred to as an act of malicious compliance; it is likely that the company will have to amend its policies eventually.
In the United States, Apple experienced a minor setback when a lawsuit filed by Epic Games compelled the company to allow developers to link to alternative purchasing options for in-app content. Apple’s compliance was executed in a manner aimed at preserving its commission structure, with the presiding judge indicating that Apple may be found in violation of her ruling.
Similar investigations and legal actions have also taken place in a variety of other nations, such as Australia, India, Korea, and Japan.
China’s Potential Antitrust Inquiry
There have been previous discussions regarding potential antitrust investigations in China. A lawsuit was filed by an iPhone user in 2021, but the case was dismissed as the court determined that Apple’s commission rates aligned with those of Android app stores, indicating no substantiation that consumers faced higher costs.
However, Bloomberg reports that the nation’s antitrust authority is weighing the possibility of launching an investigation.
China’s antitrust regulatory body is preparing the groundwork for a possible inquiry into Apple Inc.’s policies and the fees imposed on app developers, as part of a wider initiative by Beijing that could escalate tensions in the ongoing trade war with the United States.
The State Administration for Market Regulation is scrutinizing Apple’s practices, which encompass a commission of up to 30% on in-app purchases and restrictions against utilizing external payment methods and storefronts, according to sources familiar with the situation.
Potential Leverage in Trade Tensions
While China has long hinted at the possibility of antitrust inquiries into Apple and other US corporations, the timing of this development does not seem to be coincidental.
Although Trump has yet to act regarding his proposed chip tariffs, he recently imposed a blanket 10% import duty on all goods imported from China. In retaliation, the Chinese government enacted tariffs on certain US products and instantly announced an antitrust investigation into Google. The news regarding Apple followed closely thereafter.
A similar situation unfolded when Trump initiated a trade war against China during his first term, making Apple a primary target for countermeasures.
Given this context, it is plausible that China aims to leverage the threat of an investigation initially, and if no progress is made, it may proceed with the inquiry—potentially using the threat of findings against Apple as a bargaining chip in the trade dispute.
Photo of Beijing skyline by zhang kaiyv on Unsplash
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