Apple collides with British regulator in fierce response to warning that may require iPhone redesign

Apple has vigorously defended its ecosystem in a newly published response to the UK’s competition watchdog.

The UK Competition and Markets Authority (CMA) today published Apple’s response to its interim report on mobile ecosystems, as well as responses from dozens of other companies, including Google, Microsoft and Epic Games.

Apple’s detailed 47-page response dismissed the interim report’s conclusions, saying the CMA had set aside the benefits of Apple’s ecosystem “without rationale, either ignoring them entirely or rejecting them on the basis of nothing more than speculation.” Apple claimed the CMA report was based on “Unsubstantiated allegations and hypothetical fears” of Apple competitors that would benefit commercially from “deep” changes in the iPhone:

…the IR made conclusions about technologies, product design, and competitive impact derived from unsupported claims and hypothetical concerns raised primarily by self-service complaints from a few multi-billion-dollar developers such as Microsoft, Facebook, Match, Spotify, and Epic, they are all seeking to make profound changes to the iPhone for their own commercial gain, without independent verification.

Apple has expressed serious concerns about the possibility of having to “redesign” the iPhone to benefit this small, powerful group:

Apple is deeply concerned that IR is proposing solutions to hypothetical problems that will lead to real-world market interventions that could force it to redesign the iPhone to benefit a handful of powerful developers. IR seems to assume that the proposed changes will be relatively minor. However, many may need a complete redesign of a product that has been around for 15 years, has been continuously improved through Apple’s investment in IP and is valued and trusted by millions of consumers.

The CMA’s proposal to allow alternative app stores on the iPhone‌ or sideloading to “minimize security risks” was dropped and failed to account for “the fact that users value this security so highly, and that many choose Apple over Android on that basis.”

Remedies that threaten Apple’s holistic approach to security will effectively remove the competitive differentiation between Apple and Android, keeping this element of choice away from users.

Apple addressed specific issues raised by the interim report, such as the company’s WebKit restrictions on iOS and iPadOS, which ban any competing browser engines on the platform. He claimed that WebKit is innovative and responds to demand for features, such as adding “new functionality to enable greater features and functionality of web applications”.

Open Web Advocacy, a group of web developers in talks with the CMA who have raised Apple’s WebKit restriction, disagree and say that “Apple’s ban of third-party browsers on iOS is anti-competitive … all artificial barriers put in place by gatekeepers should Remove them Web applications, if permitted, can provide equivalent functionality with greater privacy and security for demanding use cases.

Apple highlighted the iPhone‌’s high level of customer satisfaction, ease of use, and performance, as well as the company’s commitment to innovation and privacy. Apple rejected the findings of the interim report and ruled out the possibility of discussing changes to the company’s ecosystem.

… The findings in IR are, in fact, nothing more than hypotheses about how “likely” the Apple ecosystem is “able” to harm competition, given that they are untested and built on one-sided evidence. Hypotheses like this are insufficient to justify, let alone support, discussion of potential radical treatments at this point…

Apple urged the CMA to “make a more comprehensive analysis of the benefits that the Apple ecosystem brings to both consumers and developers, and to consider objectively the implications for consumers and competition of any proposed interventions in the markets that will be affected.” For more information, see Apple’s full response to the CMA.

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