New Zealand regulator postpones Microsoft-ActivisionBlizzard decision from February 3 to April 28

The New Zealand Commerce Commission (NZ ComCom or NZCC) has pushed back its deadline for a decision on Microsoft's acquisition of Activision Blizzard King (NASDAQ:ATVI) from February 3, 2023 (next week's Friday) to April 28, 2023.

This does not tell us anything about what the decision will ultimately be. It appears to me that in the current environment, New Zealand's antitrust agency prefers to wait and see what will happen in other jurisdictions, particularly with a view to potential remedies such as a ten-year Call of Duty license to Sony. The NZCC has now sort of synced its schedule with those of at least two other jurisdictions:

• In November, the European Commission extended its deadline to April 11, 2023.

• The UK Competition & Market Authority's statutory deadline is April 26, 2023.

• Some other jurisdictions such as Australia and China are also widely expected to reach decisions either later this quarter or during the second quarter, but no precise dates are known.

I published a timeline chart two weeks ago, which I intend to update as soon as Judge Jacqueline Scott Corley of the United States District Court for the Northern District of California has set a new schedule for the briefing process concerning some class-action lawyers' motion for a preliminary injunction. In a week from today, Microsoft and the plaintiffs will propose a schedule (they may or may not agree on the same filing deadlines) further to a recent court order. Microsoft promised Judge Corley not to close the deal before March 31 at the earliest. That fact may also have been part of the consideration when the NZCC decided on the postponement announced today.

The competition authorities of four countries have already granted unconditional clearance to the transaction. In chronological order: Saudi Arabia, Brazil, Serbia, and Chile (where a survey of Call of Duty gamers produced some interesting results).

In the United States, Microsoft is entitled to discovery of third parties with relevant information--above all, Sony--both in the Federal Trade Commission's adjudicative proceeding as well as the private antitrust litigation in San Francisco. Yesterday a Sony motion became public. It indicates that Sony is obstructing Microsoft's request for documents and/or fact witnesses. On Friday (January 27), Sony will bring a motion to quash or limit Microsoft's subpoena unless some solution can be worked out in the meantime.

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Apple increased U.S. lobbying spend by 44% in 2022, steeper hike than any other Big Tech company--and engaged in astroturfing on top of it all

For my esteemed readers, Apple's lobbying activity is relevant with a view to mobile ecosystem regulation and/or (depending on a given reader's priorities) patent policy. CNBC reports that "Apple ramped up its lobbying spending last year, increasing its total for the year by 44% compared to 2021, according to public disclosures." For 2022, Apple disclosed a total D.C. lobbying spend of approximately $9.4 million. Is that new total--which still trails behind a few other Big Tech companies--a meaningful number? Absolutely positively not.

Let's please take all of those disclosures with a grain of salt. Total transparency in lobbying is utopian. A lot of what's going on in the industry is in a gray area and not strictly lobbying.

While those transparency rules capture only a subset of the actual spend, one can still infer something from relative changes, based on the--unfortunately unverifiable--assumption that a company's degree of transparency hasn't changed too much during the same period.

On the subject of plausibility, in Apple's case it's easy to see that 2022 was a critical year: Apple sought and managed to dissuade Congress from adopting the Open App Markets Act (OAMA). I still believe the OAMA can be resuscitated. In principle, even the Republican House majority acknowledges that something must be done to protect app developers against the abuse that is happening on a daily basis. But Republicans would rather not empower the federal government too much, especially not with Lina Khan at the helm of the FTC. In a Wall Street Journal opinion piece, former Attorney General William Barr (appointed by, but never in thrall to Donald Trump), argues against an overhaul of the antitrust laws, yet he is right that "case-by-case antitrust litigation alone won't rein in Big Tech" and that "a coherent response to the multifaceted problems caued by Big Tech's dominance" is needed.

In Europe, App Store-specific rules are going to make an impact, though in 2024 at the earliest: the EU's Digital Markets Act (DMA) takes time to be implemented, and in the UK, similar legislation often referred to as the DMU (the Competition & Market Authority's Digital Markets Unit, which will enforce the envisioned law) is also approaching fast (meanwhile, Apple is challenging--on a basis I consider reasonable--a market investigation reference by the CMA). But the U.S. is Apple's largest market, and since Apple unilaterally imposes on app developers a forum-selection clause in favor of the Northern District of California--where it then argues that it is immune under the Foreign Trade Antitrust Improvements Act (FTAIA)--there is another reason for which it is the single most important jurisdiction for Apple.

Enforcement in jurisdictions such as Brazil has the potential to make a difference. For example, I believe that South Korean lawmakers, who pioneered mobile app store legislation (which is separate from the antitrust enforcement action against Apple in the same jurisdiction), encouraged other legislatures (such as in the EU) to take similar steps. Also, we need initiatives--regulatory as well as legislative, and litigation, too--in all of the major markets because chances are that Apple will not stop its abusive conduct wherever it is not required to do so under the law. Google, by contrast, may at some point prefer to have one set of rules around the globe, though it's definitely not there yet.

Apple's U.S. lobbying spend is not limited to the federal level. They also had to fend off various state law initiatives concerning the App Store as well as the right to repair. The numbers CNBC's article refers to are exclusive of state-level lobbying.

But even at the federal level, Apple spends a whole lot more than that sub-$10M amount. ACT | The App(le) Association alone has a budget of about $10M per year and is largely funded by Apple as Bloomberg's Emily Birnbaum uncovered. Some of that is obviously spent at the state level and in Brussels. Nevertheless, it shows what is actually being spent on lobbying.

Some of the soft costs are also huge. Reportedly, Tim Cook had a number of meetings on Capitol Hill. If one looked at all of the hard and soft costs involved, his meetings alone have likely cost Apple more than the $9.4 million they reported.

It's time for some serious federal antitrust enforcement action against Apple. The DOJ may want to wait for the Ninth Circuit opinion in Epic Games v. Apple, which could be very helpful with a view to market definition, but whoever loses will appeal that decision to the Supreme Court and, potentially, petition for a rehearing en banc before doing so.

The DOJ is claimed to be about to file a second Google lawsuit, which will focus on ad tech (the first one will go to trial later this year). I'm not against that, but I'm not enthusiastic either because I don't like the optics of Google being sued for a second time before Apple gets slapped, whic his why I said the following on Twitter:

The DOJ may be able to prove harm to the competitive process in this context, but the mich bigger issue facing the advertising industry is App Tracking Transparency.

Why is the DOJ bringing a second Google case before a first Apple case? https://t.co/dLCk38bvPL

— Florian Mueller (@FOSSpatents) January 24, 2023

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Sony doesn't want to provide documents and/or witnesses Microsoft requested in Federal Trade Commission adjudicative proceeding regarding its Activision Blizzard deal

On Wednesday, I wrote that Sony may live to regret the market definition and theory of harm it espouses in connection with Microsoft's acquisition of Activision Blizzard King (NASDAQ:ATVI), and that "the top three priorities for third-party interrogatories and depositions will be Sony, Sony, and Sony." Today it turned out that Sony--despite all of its efforts to lobby regulatory authorities over the deal--is indeed uncomfortable with its obligations as a highly relevant third party to the Federal Trade Commission's in-house adjudicative proceeding as well as the private antitrust lawsuit in the Northern District of California that is going forward in parallel.

On Friday, Sony Interactive Entertainment made a filing with the United States Federal Trade Commission's in-house court that just became public:

The filing says Microsoft served a subpoena on Sony on January 12, which according to Sony did not name the proper recipient and was not properly served, so Microsoft revised it and served Sony again last Tuesday (January 16). Sony would have had only until January 20 (Friday) to file a motion to quash or limit, or to otherwise respond to, the subpoena. That was the date Microsoft stated in the original subpoena as well as in the revised one. Sony understands, however, that Microsoft is fine with giving Sony a one-week extension, i.e., until this week's Friday, January 27. Therefore, Sony brought a motion for an extension of time that it described as unopposed ("agreed motion").

The fact discovery cutoff date in that adjudicative proceeding is April 7. Some of the time between now and that cutoff date may have to be spent on the resolution over this discovery dispute.

The motion notes that "[n]egotiations between [Sony Interactive Entertainment] and Microsoft as to the scope of [Sony Interactive Entertainment]’s production and a discovery schedule are ongoing." This tells us two things:

1. Microsoft has apparently requested documents from Sony that the latter--the only vocal complainer over the transaction in question--isn't willing to provide without a fight. Alternatively or additionally, there could also be disagreements over Sony executives whom Microsoft's lawyers would like to depose.

2. As the motion notes, the purpose of the extension is for the two companies to try and work it out (if not in whole, then at least in part). Should those efforts fail to result in a complete agreement on the scope of the discovery Microsoft's lawyers can conduct of Sony's business, Sony apparently intends to file--on Friday--a motion to quash or limit the subpoena. In that case, we'll get an idea as to what parts of Microsoft's subpoena Sony is unwilling to comply with.

Microsoft is the first-named defendant to the FTC's in-house complaint. It is part and parcel of Microsoft's fundamental rights as a defendant to be allowed to take discovery of third parties. All the facts must be put on the table in order for Administrative Law Judge (ALJ) D. Michael Chappell in Washington (and soon also United States District Judge Jacqueline Scott Corley in San Francisco, at some point with the assistance of a jury) to be able to make the right decisions.

If Sony doesn't like that, it can always cut things short by accepting the ten-year Call of Duty license that Microsoft has publicly offered. Without a single vocal complainer left, competition authorities would presumably not be interested in attempting to block the deal.

Sony's own business model is "fair game" for discovery in this context. Sony is essentially alleging that Microsoft would do with ABK's games what Sony is doing all the time with other games: Sony acquires studios to have more first-party titles, and enters into exclusive agreements over third-party titles or particular features of such titles (for example, Call of Duty - Modern Warfare II comes with various "exclusive benefits" for PlayStation gamers).

In connection with Microsoft-ActivisionBlizzard, Sony is just a third-party complainer and not directly exposed to any risks. But Sony finds itself on the receiving end of antitrust actions from time to time, such as the PlayStation You Owe Us class action in the UK. Some of Sony's dirty linen may get washed in public when those Activision Blizzard cases go to trial--and come back to haunt Sony.

Lawyers from the Cleary Gottlieb firm--the most senior one of whom appears to be D. Bruce Hoffman, a former Director of the FTC's Bureau of Competition--brought the motion on Sony's behalf. Cleary also made a filing for Sony with the UK Competition & Markets Authority (CMA). I have a lot of respect for that firm. I'm not surprised Sony retained Clearly, whose antitrust practice group has been adverse to Microsoft on various occasions, even including an EU case about 20 years ago. It's just that even the best lawyers can't make a case out of thin air, and can't help their clients avoid all of its discovery-related obligations.

Given that Sony doesn't want all of the facts about its own content-centric strategy to be discussed in public trials, and that there are no signs of Sony ever having reacted constructively to Microsoft's ten-year licensing offer, I strongly suspect that we will see a motion to quash or, more likely, limit the subpoena. The scope of that motion may, however, very well be narrowed a bit by the talks that are being held these days.

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Nokia announces 5G patent license agreement with Samsung: details unknown, 'multi-year period'

Nokia just announced a new patent cross-license agreement with Samsung. The previous agreement expired "at the end of 2022" according to Nokia's press release; the new contract term starts on January 1, 2023, and "Samsung will make payments to Nokia for a multi-year period."

The last announcement of a Nokia-Samsung renewal was about four years ago. Prior to that one, the parties agreed to have the financial terms set by an arbitration panel (which is what Samsung recently agreed upon with InterDigital). So far, Nokia and Samsung have always been able to avoid infringement litigation.

Nokia's press release contains the following quote from Jenni Lukander, President of Nokia Technologies:

"Samsung is a leader in the smartphone industry, and we are delighted to have reached an amicable agreement with them. The agreement gives both companies the freedom to innovate, and reflects the strength of Nokia’s patent portfolio, decades-long investments in R&D and contributions to cellular standards and other technologies."

In September, Mrs. Lukander gave a presentation in New York City, explaining Nokia's IP strategy (particularly also its growth strategy) to financial investors and analysts. She said that Nokia was facing the need to renew various license agreements in the fiscal quarters ahead. Certainly Samsung was a major item on the list, and that one has been crossed off in a positive way for Nokia.

Samsung is known to negotiate hard, but constructively. It is interesting to see that the parties kept negotiating for another three weeks after the expiration of the previous agreement instead of resorting to litigation. By contrast, Nokia sued OPPO a couple of days after the previous license agreement expired in mid-2021.

In December it became known that Samsung recently (and silently) extended its patent license agreement with Huawei, a company that has become a net licensor without even treating patent licensing as a strategic business area.

What is unknown is when Nokia's current patent license agreement with Apple will expire. From industry circles and analysts I've heard different views. According to some people, the agreement would have expired last summer, but Nokia's numbers don't suggest that Apple stopped paying. Currently, the most likely dates of expiration would be the end of this year or the middle of next year, given that the last renewal was in mid-2017 (and the related agreement had expired at the end of 2016).

The biggest renewal problem that Nokia is facing as we speak is the situation with OPPO. Nokia has recently lost more decisions than it won. Where Nokia has leverage, OPPO has left the market; where OPPO sells large numbers of phones, Nokia lacks leverage so far. Nokia accuses OPPO of hold-out, and OPPO gave Juve Patent the following quote:

"OPPO has committed to enter into a licence with Nokia on the FRAND terms that the Chongqing court will set in the ongoing rate setting proceedings between the parties. Nokia has so far been unwilling to renew its licence with OPPO on fair and reasonable terms. However, OPPO hopes that Nokia will now fully engage with the Chongqing proceedings and confirm that it will honour its FRAND undertaking by similarly committing to enter into a licence on the terms set, in order that this dispute can be brought to an end."

Nokia is also embroiled in litigation with vivo, another Chinese smartphone maker that has a limited presence in Europe and largely serves other geographic markets.

The terms on which Nokia agreed with Samsung are unknown, and Samsung's gadgets have a higher average price than OPPO's and vivo's products, which is why I can't tell whether the agreement announced today will impact Nokia's negotiations with OPPO and vivo, such as the Chinese FRAND determination case that is underway in Chongqing.

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Burgeoning IP and antitrust jurisdiction: Brazil's Superior Court of Justice allowed Ericsson to enforce preliminary injunction against Apple over FRAND-pledged standard-essential patent

The dispute between Ericsson and Apple that got settled last month has put two Latin American jurisdictions on the standard-essential patent (SEP) litigation map:

• A preliminary injunction (PI) in Colombia barred Apple from selling and importing 5G-capable devices for about four months. Carlos Olarte, founding partner of the OlarteMoure firm, made patent litigation history.

• It came to light only this month that some rather interesting decisions had also come down in Brazil, South America's largest economy. The most important one was made by the Superior Tribunal de Justiça (STJ; Superior Court of Justice). In a major win for Ericsson's counsel, Licks Attorneys' Rodolfo Barreto and founding partner (who once worked as a full-time intern for the Federal Circuit's famous former Chief Judge Rader) Carlos Aboim, the enforcement of a temporarily-stayed SEP-based PI against Apple was allowed.

Here's the original decision (in Portuguese):

December 6, 2022 ruling on internal appeal ("agravo interno") in Ericsson v. Apple by Brazil's Superior Tribunal de Justiça (unanimous decision by Reporting Judge Antonio Carlos Ferreira, Presiding Judge Raul Araújo, and Judge Marco Buzzi)

A recording of the STJ ruling is available on the court's YouTube Channel (starting at 29:39).

Little was known about the Brazilian proceedings during the course of last year. About a year ago, I reported on the fact that some PI motion(s) had been filed, and followed up when Apple mentioned in a U.S. court filing that Ericsson was also seeking a PI against a Brazilian Apple distributor.

The fact that the Brazilian STJ decision was rendered three days prior to the global Ericsson-Apple settlement is certainly interesting, but there also was a Texas trial underway, so I believe it was one relevant factor that informed the parties' positions (but obviously not the only one). Looking beyond this particular dispute, it is fair to say that Latin America is an increasingly interesting continent for technology law (IP and antitrust), and Brazil is an up-and-coming jurisdiction for technology disputes:

• The reasoning behind the Brazilian STJ's decision was that Apple should not be allowed to continue to infringe Ericsson's patents without paying any royalties. A court in Rio de Janeiro had granted a PI over a 5G patent (Reporting Judge: Claudio Dell'Orto), requiring Apple to either leave the Brazilian market or to make payments in accordance with the prior global patent license agreement (apparently $200 million per year). But on a Sunday on which Brazil's most recent presidential elections began (October 2, 2022), enforcement was stayed. Licks Attorneys--the firm that according to my research has represented patent holders in all (23) information and communications technology patent infringement cases in Brazil so far--kept on fighting and got an unusually soon hearing date (December 6).

  The key rationale on the STJ's part was that there is no reason why PIs should not be granted over SEPs (with the FRAND pledge being deemed a matter of contract law that does not weigh against injunctive relief), and to encourage negotiations. Ericsson never wanted the Brazilian courts to set a royalty: it sought to stop infringement until a new agreement would be struck.

  Under the STJ's decision, Apple would not have been required to make royalty payments based on its global use of Ericsson's patent portfolio, but would have had to compensate Ericsson for the use of its patents in Brazil (to the tune of $3 per device, with the concomitant inconvenience of having to make royalty reports). In other words: no more hold-out. Damages owed at the very end of infringement litigation were not considered an adequate remedy.

  That reasonably IP-friendly judicial philosophy contrasts with what you find in some other jurisdictions. For instance, a Dutch court denied Nokia a PI against OPPO, and the same judge had previously denied Ericsson one against Apple even over a non-SEP, based on a balancing of the hardships.

  That said, it's not a cakewalk for plaintiffs: a PI is granted only if there is a strong prima facie showing of a likelihood of success on the merits. The threat of an injunction does, however, bring infringers to the negotiating table.

• On Thursday I reported on a decision by Brazil's antitrust authority (CADE) to open formal investigations of Apple's App Store terms and policies further to a complaint by MercadoLibre (Mercado Livre in Portuguese) and another regional e-commerce company, Clique.

• In October, I was favorably impressed with CADE's well-reasoned decision to grant unconditional clearance to Microsoft's acquisition of Activision Blizzard.

Getting back to Ericsson v. Apple, there was also a 4G PI that likely would have become enforceable in the wake of the STJ decision in the 5G case. And on the day of the STJ decision (December 6), a Rio de Janeiro district court entered a PI against Apple over two non-SEPs.

Three other information and communications technology patent holders also obtained PIs in Brazil: DivX (against Netflix and Amazon), Philips (against TCL), and G+ Communications against Samsung. In a procedurally unusual case, Disney sought a declaratory judgment of non-infringement against DivX (apparently out of fear of being enjoined there), but a settlement fell into place shortly thereafter.

An injunction that VoiceAge EVS obtained against HMD in Brazil was mentioned in a post on that dispute last year.

Sophisticated patent holders increasingly bet on Brazil, and I have a hunch that it won't be long before this blog will learn about the next interesting complaint or decision in that jurisdiction.

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Apple argues foreign app developers cannot bring antitrust lawsuits ANYWHERE on Earth: developer agreement requires suing in California, but FTAIA allegedly immunizes Apple

In the previous post I acknowledged that Apple has a reasonable basis to challenge the UK Competition & Market Authority's market investigation reference over mobile browser engines and cloud gaming. But in some other respects, Apple is the Evil Empire, extremely unreasonable, and acts in highly abusive ways.

A class-action lawsuit brought by French publishers over the way Apple's App Store terms and policies affect them puts Apple's utter unreasonableness on full display. Apple unilaterally imposes a forum-selection clause on app developers: Northern District of California. But when foreign developers actually sue there, as do those French media companies, Apple argues that the Foreign Trade Antitrust Improvements Act (FTAIA) bars such claims.

As Epic Games CEO Tim Sweeney once mentioned in a tweet I haven't been able to find again (search is an area in which Twitter has huge room for improvement, and using Google to search Twitter is also suboptimal), Apple's position taking in different jurisdictions often amount to denying liability under the antitrust laws of any jurisdiction. Epic filed lawsuits in the U.S. (where a Ninth Circuit panel is now working on its decision), UK, and Australia, and Apple then moved to dismiss or stay the foreign cases in light of the California action, but in California argued that any remedies could not apply to foreign markets.

If one thinks it through, Apple's positions across jurisdictions are just another expression of the neofeudalist attitude of an arrogant and abusive organization that knows no shame: the tyrannical dictator forces developers to sign agreements that bar them from suing anywhere other than in the Northern District of California, and then tells foreign developers serving foreign target markets that they have no rights under the antitrust laws of the United States "because FTAIA".

In the end, only entities who are not bound by Apple's unilaterally-imposed developer agreement would be able to bring antitrust cases in foreign jurisdictions: competition authorities and, maybe, consumers.

Heads I win, tails you lose. Or: What's mine is mine, what's yours is mine, too. That behavior, in and of itself, constitutes an abuse.

The case (Société du Figaro et al. v. Apple) was already filed in August (in the Northern District of California), Apple responded with a motion to dismiss in October, and as I suggested at the time, the complaint was subsequently amended:

Société du Figaro et al. v. Apple (case no. 4:22-cv-4437-YGR, N.D. Cal.), December 2, 2022: Plaintiffs' First Amended Class Action Complaint for Violations of the Sherman Act, California Unfair Competition Law, and California Cartwright Act

On Friday, Apple renewed its motion to dismiss:

Société du Figaro et al. v. Apple (case no. 4:22-cv-4437-YGR, N.D. Cal.), January 20, 2023: Defendant Apple Inc.'s Motion to Dismiss Plaintiffs' Amended Complaint

Apple describes "plaintiffs' purely foreign claims" as "[t]ransactions between French developers and foreign consumers, made on foreign App store storefronts, in foreign currency, and through a foreign (non-party) Apple entity" as "foreign nonimport commerce, not subject to any FTAIA exception."

Apple says "short shrift" should be given to the French publishers' argument involving the developer agreement's U.S. choice-of-law provision. Apple points to a Second Circuit decision (Lotes Co. v. Hon Hai Precision Industry, the latter being Foxconn, Apple's largest contract manufacturer) where the holding was that a party to such an agreement "remain[s] free to argue that, under the FTAIA, the Sherman Act does not apply to or regulate the conduct at issue in this case."

The 2nd Cir. decision is not binding in the 9th Cir., and therefore not on Judge Yvonne Gonzalez Rogers. One can reasonably disagree with it. But this is just one of several arguments made by the French publishers as to why the FTAIA does not bar their U.S. federal lawsuit with respect to foreign sales.

Those companies also offer their apps to U.S. consumers, but presumably their U.S. revenues are minuscule compared to the ones in France and other French-speaking countries and regions. So the FTAIA would not dispose of the entire case, but if Apple prevailed on its FTAIA argument, it would render the litigation commercially insignificant.

I plan to comment on the other elements of Apple's motion to dismiss as the briefing process unfolds. Apple really doesn't want to deal with litigation over its pernicious App Tracking Transparency (ATT) framework, and argues that the French publishers still don't get market definition right and, in any event, lack standing to challenge ATT. As for the market definition underlying the publishers' App Store claims, Apple expressly reserves the right to oppose their single-brand market definition, but does not raise that question at the motion-to-dimiss stage. What I think may be the focal point of the discussion at the motion-to-dismiss hearing is Apple's argument that the settlement in the Cameron v. Apple developer class-action litigation resolved the key issues, and now the same law firm (Hagens Berman) is suing Apple again, but with different plaintiffs (and now even challenging the reduced 15% app tax).

I'm one of those developers who consider the Cameron settlement's terms extremely unsatisfactory. The French publishers' case has more potential because that's a group of reasonably large and sophisticated plaintiffs who are not going to settle for a Cameron-style set of terms.

By the way, one developer wrote a letter to Judge YGR earlier this month, complaining that even though he's clearly a member of the class and is entitled to "a substantial sum" per the outcome of the Cameron litigation, he was not contacted about the settlement:

Cameron et al. v. Apple Inc. (case no. 4:19-cv-3074-YGR, N.D. Cal.), January 6, 2023: letter from Lionheart Software LLC

It's unknown whether this was just an oversight or clerical error affecting a single developer or whether there's a more fundamental problem.

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Apple apparently argues 'shall' means 'must' in appeal of UK antitrust authority CMA's decision to investigate mobile browsers and cloud gaming based on allegedly elapsed deadlines

On Friday the UK Competition Appeal Tribunal (CAT) published a summary of application (PDF) of Apple's January 18, 2023 appeal of the November 22, 2022 decision of the UK Competition & Markets Authority (CMA) to make a market investigation reference (MIR) into the markets for mobile browsers (particularly browser engines) and for the distribution of cloud gaming services. The court also announced that the initial case management conference would be held on Tuesday, January 24.

Apple's appeal on procedural grounds is not unreasonable, and I say so even though I

• called the market inquiry that gave rise to this MIR "a great initiative",

• encouraged my readers to make submissions to the CMA at that stage,

• welcomed a former Twitter CEO's "enDorseyment" of the Open Web Advocacy group's work on this issue, and

• defended in a Twitter discussion the CMA's decision to look at the combination of mobile browser and cloud gaming issues.

For as much as I'd like to see the CMA fend off this challenge to its MIR decision, this appeal could go either way.

The court summarizes Apple's sole ground of review ("... the MIR Decision [...] is ultra vires") as arguing that none of the following statutory requirements have been met:

"Apple contends that in circumstances where the CMA has published a Market Study Notice ('MSN'), sections 131A and 131B of the Act require that (i) any proposal for a market investigation reference must be made, and consultation on that proposal must begin, within six months of the date of the publication of the MSN; (ii) the CMA is required to issue its final report on the market study within 12 months of the MSN; (iii) the final report must state any decision to make a market investigation reference pursuant to section 131 of the Act, the reasons for that decision, and such information as considered necessary to facilitate an understanding of that decision; and (iv) where a market study report contains a decision to make a market investigation reference, the reference must be made at the same time as the publication of the final report." (emphases added)

In the quoted passage, I highlighted the words that indicate hard and fast deadlines.

If that statutory interpretation is right, then it has to be applied to the following facts summarized by the court:

The CMA

• launched a mobile ecosystem market study on June 15, 2021,

• gave notice of a decision not to make a market investigation reference on December 14, 2021 (and on the same day published an Interim Report that mentioned the decision not to investigate further),

• on June 10, 2022 published a Final Report, "taking account of representations made to it after the [Interim report] and after the CMA itself having conducted further analysis" and launching a public consultation as to a potential MIR, and

• made the MIR decision on November 22, 2022.

So let's compare the deadlines based on Apple's interpretation to the actual dates of the procedural events:

Procedural milestone	Deadline according to Apple	Actual date
Market study notice	N/A	June 15, 2021
Final report on market study	June 14, 2022	June 10, 2022
Market investigation reference	June 14, 2022	November 22, 2022

The dispute about whether the deadline for the final report on the market study was met turns on what one believes to be indispensable elements of that report. In the court's summary, Apple argues that the final report must state any MIR decision, the reasons for that decision, and further information that facilitates an understanding of the decision. Here, the final report came first, and the MIR came later.

The statute (Sec. 131B of the Enterprise Act 2002) consistently uses the term "shall" with respect to what the CMA is supposed to do ("shall ... within", "shall ... contain").

So what shall we make of that? Has Apple "shall"-shocked the CMA or is its whole argument an empty shell?

The Bar and Bench website says:

"Shall is one of the most corrupted and litigated words in the language of the law. Over 100 pages in the encyclopaedia of Words & Phrases are devoted to a summary of more than 1,300 precedents from common law jurisdictions interpreting shall! This misuse or abuse of shall extends to legislation and private legal documents in equal abundance."

Apple is not the first party to litigate over the meaning of "shall" nor will it be the last.

Cornell Law School's Legal Information Institute first describes "shall" as a pretty strict term in the United States:

"Shall is an imperative command, usually indicating that certain actions are mandatory, and not permissive. This contrasts with the word “may,” which is generally used to indicate a permissive provision, ordinarily implying some degree of discretion."

But it points to precedent from Illinois according to which it really depends on the context:

"[W]hen used in a statute, the term ‘shall’ does not have a fixed or inflexible meaning and may be given a permissive or directory interpretation depending on the legislative intent. If a statutory provision using the term ‘shall’ merely directs a manner of conduct to guide officials or is designed to secure order, system, and dispatch in proceedings, it is generally 'directory'."

The law firm of Allen & Overy reported on a Court of Appeal (for England & Wales) decision acccording to which "shall" is merely an expression of the parties' intention at the time of contracting.

Another British law firm, Ashurst (which represents UEFA in the European Superleague Company EU antitrust case, successfully so far), published a highly instructive overview of how UK market studies and market investigations work, and appears to give the statute a similar interpretation as Apple's counsel from Gibson Dunn does:

"Unless the CMA has issued a market study notice, it is not bound by statutory time limits nor does it have any of the compulsory information gathering powers when conducting work under its general review functions."

Put differently, if a market study notice was issued (such as in this case), the CMA would be bound by statutory time limits according to Ashurst.

That is a defendant-friendly interpretation that presupposes a legislative intent of giving the targets of a market study legal certainty after hard and fast deadlines.

It's "legit" for Apple to ask the Competition Appeal Tribunal to rule on this question of statutory interpretation, and clarification would indeed be helpful. That said, the iOS browser engine monopoly must be broken and all cloud gaming providers should be free to offer their services to iPhone and iPad users without having to submit each game to Apple's arbitrary app review and being subjected to an excessive app tax.

A market investigation lowers the hurdle for the CMA: it doesn't have to prove wrongdoing, just adverse effects on competition (abbreviated as AEC, which in other antitrust jurisdictions, however, stands for "as efficient competitor") and has greater powers to impose remedies. Otherwise a conventional antitrust investigation of Apple's conduct would be required, and Apple would have to be shown to have abused a dominant position in the relevant market. Apple would like to deprive the CMA of its more powerful tool, and essentially argues that the CMA has deprived itself of that tool by failing to abide by the applicable statute.

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