China regulator said to be reviewing antitrust complaint against Apple

Move comes after tech giant was accused of abusing its dominant position in smartphone apps, sources say

PUBLISHED : Wednesday, 30 August, 2017, 1:58pm
UPDATED : Wednesday, 30 August, 2017, 10:49pm

China’s State Administration for Industry and Commerce is reviewing an antitrust complaint accusing Apple Inc of abusing its dominant position in smartphone applications, people familiar with the matter said.

The regulator is studying the information following a complaint filed on behalf of developers before deciding if a formal investigation is necessary, said the people, who asked not to be named because the matter is not public. The review is preliminary and Chinese antitrust agencies usually review such information before deciding whether an official investigation is needed.

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Beijing-based law firm Daxiao said earlier this month it filed complaints on the developers’ behalf to the SAIC and the National Development and Reform Commission. The lawyers accused Apple of removing apps without a proper explanation and taking an excessive 30 per cent cut of in-app transactions, it said in an August 8 statement. The law firm represents close to 50 developers, producing games and a number of other apps, according to its managing partner Lin Wei.

Apple declined to comment, referring to an earlier statement saying it had guidelines for developers and an escalation process for apps it rejected. SAIC’s antitrust bureau did not answer calls seeking comment.

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The complaint comes just as Apple is expected to introduce its 10th anniversary iPhone, which could help it regain market share from local rivals such as Oppo and Huawei. Greater China, which includes Hong Kong and Taiwan, is Apple’s biggest overseas market, contributing about 18 per cent of sales in the most recent quarter.

Chinese firms have complained of monopolistic practices by foreign companies in the past, spurring investigations and, in come cases, sanctions. Qualcomm in 2015 agreed to pay US$975 million to settle a case brought by the NDRC that accused the company of abusing its control over mobile phone chips.

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Apple itself has faced the ire of Chinese consumers and been on the receiving end of regulatory crackdowns. Apple’s iTunes Movies and iBooks services were shut down last year by regulators after less than seven months of operations, and revenue there has fallen for six consecutive quarters. In 2013, it was forced to apologise after state broadcaster CCTV criticised the company’s customer service standards.