The Court of Appeal has today overturned the CAT’s ruling that that CMA’s market investigation into mobile browsers and cloud gaming was commenced out of time.
Apple challenged the CMA’s decision to initiate a market investigation. By way of background, the CMA had previously carried out a market study in relation to mobile ecosystems between June 2021 and June 2022 during which the CMA decided not to make a market investigation reference. The CMA reached that conclusion because it took the view that the competition concerns it had identified were better addressed using new powers to be vested in the Digital Markets Unit (under the Digital Markets, Competition and Consumers Bill). However, following delays to the introduction of those new powers, the CMA decided that it should consult on a market investigation reference in relation to two particular topics, mobile browsers and cloud gaming. That consultation led to a market investigation reference in November 2022. Apple brought proceedings before the CAT arguing that the reference did not comply with the time limits in sections 131A and B of the Enterprise Act 2002. The CAT upheld Apple’s challenge in a ruling dated 31 March 2023.
The Court of Appeal has reversed the CAT’s ruling. It held that the time limits relied on by Apple apply to the process of consultation within a market study, and do not otherwise limit the CMA’s power to make a reference under section 131 of the Enterprise Act 2002. The Court of Appeal noted that there are express limits on the CMA’s power to make a reference under section 131(4) of the Enterprise Act 2002 which did not apply in the circumstances. The only applicable condition for the making of a reference was the threshold test in section 131 that there are reasonable grounds for suspecting that a feature of the market prevents, restricts or distorts competition, and that condition was met. The CMA’s construction of the Act was also consistent with its purpose which was to promote competition and protect consumers.