Apple and Google hold 'vice-like grip' on mobile market, CMA says
Their duopoly is limiting competition and choice for customers, says competition watchdog
The UK ' s Competition and Markets Authority (CMA) says it is concerned about the "effective duopoly" of Apple and Google in the mobile systems market, which could lead to less competition and choice for customers.
On Tuesday, the antitrust regulator published the first part of its mobile ecosystem market study, which examines whether the dominance of the two firms in supplying operating systems (Android and iOS), app stores (Play Store and App Store) and web browsers (Chrome and Safari), is resulting in customers losing out across a wide range of areas.
In its interim report, the CMA says it has provisionally found that the two firms have created "largely self-contained ecosystems" by leveraging their market dominance, which is making it nearly impossible for other firms to compete with them.
The regulator thinks Apple and Google ' s control of the mobile ecosystem is not only limiting choice and innovation (such as new ways to play games through cloud services on iOS devices) for customers, but also leading to higher prices.
Apple doesn't allow any alternative app stores on iOS, while Google has deals with other smartphone makers that "encourage the pre-installation" of Play Store and Chrome on Android phones.
Moreover, both companies have rules in place for access to their app stores which some developers view as "overly restrictive".
Developers are required to accept these rules, such as paying up to 30 per cent commission to Apple and Google, in order to reach users.
The CMA report also lists potential remedies for tackling anti-competitive behaviour. The regulator suggests:
- Making it easier for customers to switch between iOS and Android devices when they want to replace their phone without losing data or functionality
- Making it easier for users to choose alternatives to Google and Apple for services like browsers, in particular ensuring that they are able to easily set which browser they have as default
- Making it easier to install apps through methods other than the Play Store or App Store, including the web apps
- Enabling all apps to give users an option of how they pay in-app for things like game credits or subscriptions
"Most people know that Apple and Google are the main players when it comes to choosing a phone. But it can be easy to forget that they set all the rules too - from determining which apps are available on their app stores, to making it difficult for us to switch to alternative browsers on our phones," said Andrea Coscelli, chief executive of the CMA.
The CMA's investigation into big tech firms had already revealed some "worrying trends" that could harm businesses and consumers if they go unchecked, Coscelli said in June, when the probe was announced.
The ongoing investigation is part of the CMA's broader plan, which includes setting up a new pro-competition regulatory regime for online markets through the new Digital Markets Unit (DMU).
The DMU was established in April with the aim of promoting greater competition and innovation in digital markets and to protect consumers and businesses from unfair practices.
The CMA is also investigating Google's Privacy Sandbox proposals and Apple's App Store over competition concerns.
Earlier this year, the regulator said that it was probing whether Apple's terms and conditions for app developers are forcing users to spend more money for apps and add-ons.
In January, Apple reduced its App Store cut from 30 per cent to 15 per cent for developers with annual revenues less than $1 million in 2020.
According to CNBC, Apple's App Store generated an estimated $50 billion in revenue in 2019.
Apple also said that "in 2019 alone, the App Store ecosystem facilitated $519 billion in commerce worldwide - with over 85 per cent of that total accruing solely to third-party developers and businesses of all sizes."
The CMA also announced in June that it would work with Google on the company's plan to remove third-party browser cookies and other functionalities from its Chrome browser. The announcement came after Google's made a set of proposals to end an antitrust investigation by the CMA.