The UK’s antitrust watchdog has given the clearest indication yet that interventions under the country’s upcoming competition reform will target tech giants Apple and Google, including their duopolistic control of the mobile market via iOS and Android, their respective app stores, and the browsers and services bundled with mobile devices running their OSes. As a result, it might be excellent news for third-party developers hoping to gain traction for alternatives to Apple and Google’s main applications and services in the future.
The Competition and Markets Authority (CMA) announced today that it has “provisionally” concluded that Apple and Google have been able to use their market power to create “largely self-contained ecosystems,” and that the degree of lock-in they wield is harming competition by making it “extremely difficult for any other firm to enter and compete meaningfully with a new sytem.”
The Competition and Markets Authority is worried that this would result in less competition and meaningful choice for customers, according to a news statement from the agency. “People also appear to be missing out on the full advantage of inventive new goods and services — such as so-called ‘web applications and new methods to play games on iOS devices through cloud services.” The regulator is also concerned that customers would pay greater rates than they would in a more competitive market, particularly for Apple phones, app subscriptions, and transactions made within applications.
Bundling services; self-preferencing; restrictive T&Cs for third-party developers; and the 30 percent commission each platform can charge on some in-app payments are among the competition concerns raised by the CMA’s study. (Alternatively, as some enraged third parties as if Epic Games and Spotify call it, the “Apple tax,” which Elon Musk has dubbed a “de facto global tax on the Internet?”) Separately, the CMA is looking into Apple’s App Store after developers complained about unfair conditions; however, the probe is being conducted under current UK competition regulations.
The regulator is also currently intervening in Google’s Privacy Sandbox proposals, which include the latter’s plan to deprecate Chrome’s support for tracking cookies and replace it with alternative ad targeting technologies — a move that has enraged advertisers concerned that it will give Google even more market power.
In addition, the CMA is now consulting on adopting a set of undertakings from Google, which would involve the appointment of a monitoring trustee, in order to ensure the wider market that it is operating fairly. At the same time as this continuous antitrust scrutiny of digital behemoths, the United Kingdom is working on updating competition regulations to confront big tech’s market influence. Ministers want to intervene to enhance competition, suggesting specific ex-ante laws for internet behemoths to combat platform power.
However, the needed legislation for this significant “pro-competition” digital revamp is still pending. The CMA has been busy improving its grasp of digital market dynamics while waiting for new authorities to address platform power, familiarizing oneself with the standard talking points about monopolistic/anti-competitive behavior from internet giants.
It also continues to issue orders, of course. “Both corporations contend that many of these limits are necessary to ensure the security and quality of the overall service to their consumers, and in certain circumstances to secure users’ personal information,” the regulator says today, expecting backlash to its initial mobile duopoly conclusions.