Sarit Mizrahi est étudiant dans le cadre du cours DRT 6929-O.

On February 16, 2011, I wrote a blog about the possibility that Apple’s practices may be considered anti-competitive, and ended by expressing my doubts that Apple’s new competitors will be successful in overpowering this prominent company. An article in The Register, dated March 15, 2011, provides further evidence that my doubts were well founded.

According to this article, “Apple’s iOS mobile operating system runs web applications at significantly slower speeds when they’re launched from the iPhone or iPad home screen as opposed to in the Apple Safari browser, and at the same time, the operating system hampers the performance of these apps in other ways, according to tests from multiple developers and The Register”. This is yet another way that Apple has made it impossible for other mobile app companies to compete with them. Essentially, the only manner in which the apps of other entities can run smoothly on the iPhone or iPad is by distributing them through the Apple App Store, which means that 30 per cent of their profits must be given to Apple as per the requirements of Apple’s recently instated subscription policy.

This state of affairs is rather severe and, in light of existing Canadian competition legislation, it must be taken seriously. Apple is essentially in direct violation of Canadian competition law, which unequivocally prohibits anti-competitive behaviour. Section 79 of the Competition Act considers that a behaviour is anti-competitive when “(a) one or more persons substantially or completely control, throughout Canada or any area thereof, a class or species of business, (b) that person or those persons have engaged in or are engaging in a practice of anti-competitive acts, and (c) the practice has had, is having or is likely to have the effect of preventing or lessening competition substantially in a market [...]”.

Though it has been questioned whether or not Apple owns enough of a dominant position in the market to be able to consider that its behaviour is anti-competitive, the information provided in the The Register’s article leaves a lot less room to doubt that Apple is essentially in possession of such a central position. This newly found evidence of Apple’s behaviour essentially demonstrates that Apple is making it virtually impossible for any new entity to penetrate the market it has created with respect to the iPhone and iPad apps, and is thus in full control of this market. In addition to all of this, Apple also controls the prices in this market by requiring that they be given a 30 per cent cut of all apps sold in the Apple App Store. Apple therefore effectively fulfills all the elements established by Canadian jurisprudence (The Director of Investigation and Research v. NutraSweet and Director of Investigation and Research v. Laidlaw Waste Systems Ltd.) that serves to demonstrate that the first criterion of section 79 of the Competition Act is fulfilled.

Apple’s behaviour in this respect can also be considered anti-competitive, as prescribed by section 78 of the Competition Act. Though Apple’s particular practice is not found in the list of anti-competitive behaviours outlined in that section, all of the prohibited actions outlined in section 78 of the Act have one thing in common : they limit the possibility of the entrance of new actors into a given market. Apple’s actions above described leave no doubt in my mind that such practices achieve precisely the types of behaviours that sections 78 and 79 of the Act attempt to prevent. As a result, the second criterion of section 79 of the Competition Act is fulfilled as well.

By limiting the possibility of the entrance of new actors into the market, Apple is fulfilling the third criterion of section 79 of the Competition Act as well, as the immediate effect of such a limitation is the prevention or lessening of competition in the market. The substantial lessening of competition in this market is evidenced by the continuous failure of entities, who attempt to create iPhone or iPad apps without going through the Apple App Store to no avail. The lessening of competition is further demonstrated by Apple’s underhanded practices which render it difficult for such web apps not originating from the App Store to function properly on Apple products.

The extent to which Apple is going to lessen competition in the market for apps does not cease to shock me. Though I continue to hope that Apple will be stopped, I cannot help but wonder what else this company will come up with to give even more rigor to the doubts I have already expressed.