Apple facing more legal headaches
The company threatens to leave the UK in response
Over the past year, Apple’s business practices have come under scrutiny from governments across the world that believe the Cupertino giant is too large and potentially abusing its powerful position. The UK government has not been absent from these intrigues, and has been mulling actions to exert more control over Apple and other ‘Big Tech’ firms.
One of the government’s latest moves is its mooted introduction of the Digital Markets Unit, or DMU, which will operate under the Competition and Markets Authority. This unit will be able to assign companies ‘Strategic Market Status’, which means they will need to follow “new rules of acceptable behaviour with competitors and customers in a move that will benefit the public and drive growth and innovation across the economy.”
The designation will be applied to companies that have “substantial and entrenched market power” and is designed to prevent them from abusing their positions to stifle competition and their rivals, according to the UK government.
At the time of writing, the proposed new powers, including details of the code of conduct affected companies would need to abide by, were undergoing consultation. Some of the new rules could include “tech platforms not
pushing their customers into using default or mandatory associated services, or ensuring third-party companies that depend on them aren’t blocked from doing business with competitors.”
And in other issues…
While the DMU does not mention Apple by name, its stated target of large tech firms puts Tim Cook and friends firmly in the crosshairs. Unfortunately for Apple, it is hardly the only legal jeopardy the company has faced recently.
Earlier in 2021, there was the lawsuit with Epic Games, where Apple was accused of running its App Store as a monopoly. And throughout the year, lawmakers around the world have been investigating whether Apple has too much power concentrated in its hands. But legal attention is not just being forced on to Apple from national legislatures and executive offices. The company is also being sued for patent infringement here in the UK – and has threatened to pull out of the UK entirely if it is forced to pay a fine.
The dispute concerns patents held by Optis Cellular Technology (dubbed a ‘patent troll’ by some) that allow devices to connect to 3G and 4G networks. In June 2021, a judge ruled that Apple had infringed these patents by refusing to pay a licence fee to Optis. The potential fine for doing so? £5 billion.
During the case in July this year, the judge asked Apple’s lawyer, “There is no evidence Apple is really going to say no [to paying the fine], is there? There is no evidence it is even remotely possible Apple will leave the UK market?”
In response, Apple’s lawyer replied, “Apple’s position is it should indeed be able to reflect on the terms and decide whether commercially it is right to accept them or to leave the [UK] market. There may be terms that are set by the court which are just commercially unacceptable.”
Apple is highly unlikely to follow through on this threat. But it is a warning uttered by many large companies around the world, from Facebook to Google to Amazon, in an attempt to get their way when they are accused of breaking the law, infringing patents, or are faced with higher taxes. Ironically, it might actually strengthen the notion that Apple is too powerful.