The provisional inquiry calls for a comprehensive investigation into the tech giants’ mobile dominance under new competition rules coming into force next year.
An independent inquiry group for the UK’s Competition and Markets Authority (CMA) has provisionally recommended that the watchdog consider investigating Apple and Google for their dominance in the mobile ecosystem.
The CMA has found that the mobile browsing market is “not working well for UK businesses and millions of phone users”.
The watchdog initially commenced an investigation following its Mobile Ecosystems Market Study in 2021, which provisionally found that Apple and Google have been able to use their market power to create “largely self-contained ecosystems” – making it difficult for other players to meaningfully compete.
In 2022, the watchdog found that the two tech giants have an effective duopoly on mobile ecosystems. “Apple and Google both have strong positions in mobile web browsing, with a combined share of supply of around 90pc for their browsers,” the CMA said at the time.
“Without interventions, both companies are likely to maintain, and even strengthen, their grip over the sector, further restricting competition and limiting incentives for innovators.”
In November of that year, the CMA opened an investigation. However, last year, Apple won an appeal against the probe, with the Competition Appeals Tribunal (CAT) ruling that the CMA failed to stick to established statutory timeframes for such investigations. The Court of Appeal subsequently found the CMA’s investigation to be lawful and set aside the CAT judgement.
The investigation recommenced in January 2024.
Now, the group has provisionally found that Apple’s rules restrict other competitors from being able to deliver innovative features that could benefit consumers.
Small UK app developers have made calls to develop ways for apps to be downloaded without the need to go through an app store, but this technology is not able to take off for iOS.
“In addition, the group has provisionally found that a revenue-sharing agreement between Google and Apple significantly reduces [other developers’] financial incentives to compete in mobile browsers on iOS,” the CMA said.
Other issues considered in the report include the way that Google and Apple users are presented with choices about which browser they use, with the finding that Apple and Google can manipulate these choices.
The inquiry group has called for a comprehensive investigation into Apple’s and Google’s activities in mobile ecosystems under new digital markets competition rules coming into force next year.
“Markets work best when rival businesses are able to develop and bring innovative options to consumers,” said Margot Daly, chair of the CMA’s independent inquiry group.
“The analysis set out in this report and a range of potential interventions considered to address the market issues identified by the group merits consideration by the CMA board under its new powers, which have been specifically designed for digital markets.”
In a statement sent to SiliconRepublic.com, an Apple spokesperson said the company believes in “thriving and dynamic markets” where innovation can flourish.
“We face competition in every segment and jurisdiction where we operate, and our focus is always the trust of our users. We disagree with the findings in the report regarding Safari, WebKit and in-app browsing on iOS,” they said.
“We are concerned that the interventions discussed in the report for future consideration under the Digital Markets, Competition, and Consumers Act would undermine user privacy and security and hinder our ability to make the kind of technology that sets Apple apart. We will continue to engage constructively with the CMA as their work on this matter progresses.”
Cloud gaming no longer a concern
The investigation also looked at concerns about how mobile cloud gaming apps are distributed through app stores, with Apple found to not allow cloud gaming apps to be made available on the App Store. However, Apple has since made changes to allow cloud gaming apps to be sold via the App Store.
“Given that the primary underlying concern has fallen away, the group has provisionally concluded there is no need for intervention by the CMA in mobile cloud gaming,” the CMA said.
The CMA is inviting comments on its provisional findings by 13 December and it expects to make a final decision in March 2025.
Updated, 4.33pm, 22 November 2024: This article was updated to include a statement from Apple.
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