UK competition watchdog to act over Apple and Google's mobile platforms

The Guardian

2 days ago

A UK watchdog has said it intends to take action to open up Apple and Google's mobile platforms to more competition to benefit consumers, businesses and app developers.
The Competition and Markets Authority has proposed to designate the tech companies as having 'strategic market status' – as they hold an 'effective duopoly' for access on mobile devices – and now intends to force the two companies to make changes to their mobile platforms.
The regulator said that it had published 'roadmaps' for Apple and Google and that it would take a 'proportionate, pro-innovation' approach to 'promote competition in digital markets while protecting UK consumers and businesses from unfair or harmful practices'.
The CMA said it would, in the first instance, focus on areas such as the tech companies' app stores – which have been criticised by developers over issues including fees of up to 30% for transactions – to ensure a 'fair and transparent' app review process, as well as making sure that smartphone users could 'steer' away from app stores to make purchases.
The watchdog, which launched an investigation into the US tech companies earlier this year, will also address restrictions Apple imposes on digital wallets to ensure that competing financial technology companies can compete.
'Apple and Google's mobile platforms are both critical to the UK economy – playing an important role in all our lives, from banking and shopping to entertainment and education,' said Sarah Cardell, the chief executive of the CMA.
'But our investigation so far has identified opportunities for more innovation and choice. Time is of the essence: as competition agencies and courts globally take action in these markets, it's essential the UK doesn't fall behind,' she said.
However, the CMA said it did not at this stage intend to force major changes such as requiring Apple to allow alternative app stores, or alternative payment methods for in-app purchases beyond its existing payment system.
Tom Smith, a competition lawyer at Geradin Partners and a former CMA director, said the competition watchdog was 'ducking' taking major decisions 'which might draw political heat'.
'The CMA is implementing the regime in a thoughtful and authoritative way, but it is doing it more timidly than it should be,' he said. 'It is proposing some useful measures that would open up competition in digital markets, but it is ducking issues that would really threaten the entrenched positions of Apple and Google, and which might therefore draw political heat. For example, they have postponed the possibility for alternative app stores to challenge the App Store's monopoly on Apple devices.'
Tim Sweeney, the founder and chief executive of Fortnite maker Epic, which has had legal battles with Google and Apple in the US, criticised the CMA's approach as 'surprisingly weak'.
'The monopolised UK app store economy has all of the vibrancy of a Soviet supermarket,' he said in a post on X. 'And consideration of unblocking competing app stores is delayed to 2026.'
The company said it could not launch its Epic Games Store on Apple's iOS platform in the UK – as it was doing in EU countries and later this year in Brazil and Japan – and that availability of its globally popular Fortnite game on Apple phones in the UK was 'now uncertain'.
The UK competition watchdog announced its investigations into Apple and Google's mobile platforms in January.
When the investigation was launched, the CMA said that virtually all smartphones sold in the UK were pre-installed with Apple's iOS or Google's Android operating systems, while their app stores and browsers had privileged positions over third-party products and services. Apple's Safari and Google's Chrome dominate the mobile browser market on iPhones and Android devices.
The CMA investigation was launched days after the appointment of Doug Gurr, the former country manager of Amazon UK, as its new chair.
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The government, which has pushed for a shake-up of regulation to kickstart UK growth, was forced to deny it was 'in the pocket of big tech' after the appointment. Tech firms, publishers and the consumer watchdog Which? subsequently wrote to the chancellor, Rachel Reeves, raising concerns that Gurr's appointment posed a threat to the independence of the CMA.
Gurr said he would make the CMA's investigations into mergers and takeovers 'simple and rapid', and Cardell said in February that a change of strategic direction was needed.
Apple responded to the CMA's decision to act by saying the proposed new rules could hamper innovation and threaten privacy and security.
'We're concerned the rules the UK is now considering would undermine the privacy and security protections that our users have come to expect, hamper our ability to innovate, and force us to give away our technology for free to foreign competitors,' a spokesperson said. 'We will continue to engage with the regulator to make sure they fully understand these risks.'
Google said its products were open-source and offered choice, security and innovation for users. 'That's why today's announcement is disappointing and unwarranted,' said Oliver Bethell, the senior director, competition, at Google.
The company said that in 2022 its Android operating system generated more than £9.9bn in revenue for British developers, supporting more than 457,000 jobs.
'It is therefore crucial that any new regulation is evidence-based, proportionate and does not become a roadblock to growth in the UK,' Bethell said.
If a company is designated as having 'strategic market status', that status can last for a five-year period, and breaches of conduct rules can result in fines of up to 10% of global turnover.