Competition and Markets Authority v Apple Inc & Ors

Under the Enterprise Act 2002, the CMA’s standalone power to make a market investigation reference is not permanently barred because it previously decided, after a market study notice, not to investigate. The phrase “in relation to the matter specified” in section 131A(1)(a) identifies the connection which triggers consultation duties; it does not impose an enduring restriction on section 131(1). The statutory scheme contains specified bars and time limits, but no implied once-only rule. The power remains subject to ordinary public-law controls, including rationality and proper purpose. The appeal was therefore allowed.

The CMA published a market study notice concerning mobile ecosystems and, after consultation, decided on 14 December 2021 not to make a market investigation reference. The decision reflected the CMA’s expectation that new digital-markets legislation would shortly provide a more suitable regulatory regime. When that legislation did not emerge, the CMA proposed a fresh reference under the standalone power in section 131(1) of the Enterprise Act 2002 and made the challenged decision on 22 November 2022.

Apple successfully challenged the decision before the Competition Appeal Tribunal, which held that the fresh proposal was part of the earlier procedure, was out of time under section 131B and was therefore ultra vires: [2023] CAT 21. The central issue on appeal was whether the Act barred a fresh standalone reference without a further market study notice.

1. Disposition. Green LJ allowed the appeal and set aside the order of the Competition Appeal Tribunal. Lord Justice Arnold agreed for the reasons given by Green LJ, and the Chancellor agreed. The decision to make the reference was intra vires and lawful.
2. Standalone power. Section 131(1) confers an independent power to make a market investigation reference where the CMA has reasonable grounds for suspecting a competition concern and neither of the statutory exclusions in section 131(4) applies. The power is discretionary and remains subject to ordinary public-law controls.
3. Scope of the MSN procedure. The words “in relation to the matter specified in the notice” in section 131A(1)(a) identify the connection between the proposed reference and the matter in the market study notice. They perform a limited and essentially cursory function. If the connection exists, the consequence is that the consultation duties in section 131A(2) are triggered. The phrase does not create an additional or enduring restriction on the separate power in section 131(1), and its function ends when the relevant notice is published and consultation begins.
4. No implied once-only rule. Parliament placed specified restrictions in section 131(4) and time limits in section 131B. It did not provide that expiry of the market-study timetable permanently barred a later standalone reference concerning related subject matter. A purposive construction must also recognise that the principal statutory purpose is promoting competition and protecting consumers. There is no general principle that an undertaking is entitled to be investigated once, and once only.
5. Public-law safeguards. The exercise of section 131(1) remains subject to rationality and the proper-purpose principle, as illustrated by Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997. Artificially using the power solely to circumvent the statutory timetable could be unlawful, but no such case was advanced on the facts. There was therefore no need to imply an additional statutory fetter.
6. Unresolved matters. Green LJ considered it arguable that anticipated legislation could be relevant to the CMA’s discretionary decision, referring to R v Secretary of State for the Environment ex parte Birmingham City Council [1987] RVR 53, but stressed that the issue had not been fully argued and was not squarely before the court. He also observed that substantial adverse material received from consultees could be relevant to the exercise of the power.

• Court of Appeal (Civil Division). The appeal was allowed and the order of the Competition Appeal Tribunal was set aside.
• Competition Appeal Tribunal. The Tribunal allowed Apple’s challenge to the CMA’s decision, holding that the fresh market investigation reference was out of time and ultra vires: [2023] CAT 21.