The two tech giants have a control that can ‘limit innovation and choice’ in the mobile market, according to the UK regulator.
The UK’s competition watchdog has suggested that mobile users are losing out because of Apple and Google’s “duopoly”.
The Competition and Markets Authority (CMA) launched a probe earlier this year into whether the two tech giants have too much control in the mobile market. It focused on their respective operating systems (iOS and Android), app stores (App Store and Play Store) and web browsers (Safari and Chrome).
In the investigation’s interim report, the CMA has 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.
“Apple and Google have developed a vice-like grip over how we use mobile phones and we’re concerned that it’s causing millions of people across the UK to lose out,” said Andrea Coscelli, chief executive of the CMA.
“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. This control can limit innovation and choice, and lead to higher prices – none of which is good news for users.”
Issues and interventions
When the majority of people purchase a phone or tablet, they are essentially entering Apple’s iOS or Google’s Android ecosystem. Globally, iOS has around a 28pc share of the mobile operating system market and Android has around 70pc.
The CMA expressed concern that this can give the two tech players control over how apps and websites are provided to users, and they can “tilt the playing field” towards their own services.
This is something that has been raised by other companies and by competition authorities in the past.
Google recently had to change its policies on allowing more search engines a place on the Android operating system, after an EU investigation found it was prioritising its own search engine. It also received a fine of more than €100m from Italy’s antitrust authority in May for not allowing an app onto its Android system for cars and “favouring its own Google Maps app” instead.
Apple has been in the spotlight for its app practices, too. The CMA and German competition regulator have both launched probes this year into the App Store for alleged anti-competitive behaviour, while the European Commission found Apple to be in “dominant position” with its commission fees for app developers.
App developers have to comply with Apple and Google’s rules to access app stores, which can involve paying commissions of up to 30pc to the tech giants. This has resulted in competition complaints from Spotify and Epic Games, the maker of Fortnite, over Apple’s control in the App Store.
Apple and Google have argued in the past that many of these measures are needed to maintain security and quality of service.
But the CMA said it was concerned that the companies are making decisions “that favour their own services and limit meaningful choice”.
The CMA’s interim report suggested a range of actions that could address these issues, such as making it easier for users to switch between iOS and Android devices without losing data or functionality.
“Any intervention must tackle the firms’ substantial market power across the key areas of operating systems, app stores and browsers,” Coscelli said.
He added that this could be done through the Digital Markets Unit, a new public body established within the CMA that will oversee regulations for the most powerful digital firms. The new unit is waiting to receive powers from the UK government.
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