Competition Czar to investigate Apple and Google ecosystem dominance

The Competition and Markets Authority (CMA) is investigating Apple and Google’s dominant positions in the mobile ecosystem.

The investigations, scheduled to end in October, will examine impact on end-users and the thousands of businesses developing apps

“Apple and Google are able to exert considerable influence over much of the content, services, and technological development provided on mobile devices,” says the CMA.

Potential requirements could include Apple and Google opening up access to functionality needed by other apps to operate on mobile devices or enabling users to download apps and pay for in-app content outside of Apple’s and Google’s app stores.

Sarah Cardell, chief executive of the CMA, said:

“The operating systems, apps, and browsers installed on our phones and tablets act as gateways to the digital world—whether for communicating with loved ones, purchasing from businesses, or accessing creative content. More competitive mobile ecosystems could foster innovation and new opportunities across services that millions of people rely on, such as app stores, browsers, or operating systems. Greater competition could also boost growth in the UK by allowing businesses to offer innovative new products and services on Apple’s and Google’s platforms.

Strategic Market Status

Under the digital markets competition regime, the CMA may designate firms with ‘strategic market status’ (SMS) and can then impose or propose pro-competition interventions. The investigations will assess Apple’s and Google’s positions in relation to operating systems, app stores, and browsers, determining whether either firm holds strategic market status in these areas.

Approximately 15,000 businesses are involved in app development for mobile devices in the UK, generating an estimated total UK revenue of around £28 billion.

“Given the importance of mobile ecosystems to people, businesses, and the economy, it is critical that competition works well, Effective competition could ensure consumers and businesses are treated fairly by Apple and Google in relation to the terms and conditions they impose” said the CMA.

“Effective competition could also create open opportunities for businesses to innovate and deliver a range of content, services, and technological developments to consumers on mobile devices. This could include AI products and services, contactless payments through digital wallets, and new types of apps accessed via mobile browsers. In turn, this could support sustained growth in sectors of the economy that rely on mobile ecosystems.”

The CMA will focus on the extent of competition within Apple’s and Google’s mobile ecosystems: It will assess how competition functions across these ecosystems and identify any barriers preventing other competitors from offering rival products and services

Favouritism

The CMAwill see whether Apple or Google use their positions to favour their own apps and services, which are often pre-installed and prominently positioned on iOS and Android devices.

The investigation will assess whether Apple or Google impose unfair terms and conditions on app developers as a requirement to distribute their apps on Apple and Google app stores. It will also explore whether users are subjected to ‘choice architecture’ that makes it difficult for them to actively choose which apps to use on their devices.

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