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UK probes Apple and Google mobile duopoly

‘Apple and Google have an effective duopoly on mobile ecosystems that allows them to exercise a stranglehold over these markets’ says UK markets regulator the Competition and Markets Authority.

The CMA is currently ‘consulting’ on the launch of a market investigation into Apple’s restrictions on cloud gaming through its App Store, and the market power of both Apple and Google in the mobile browser space. It is also taking enforcement action against Google in relation to payment practices in the Google Play store.

After a year of sniffing around, the regulator has concluded that ‘Apple and Google have an effective duopoly on mobile ecosystems that allows them to exercise a stranglehold over these markets’ – referring to include operating systems, app stores and web browsers on mobile devices. The CMA claims that without interventions, Apple and Google ‘are likely to maintain, and even strengthen, their grip over the sector, further restricting competition and limiting incentives for innovators.’

The CMA says it has looked at where it can take immediate targeted action using its current powers and is now consulting on making a ‘market investigation reference’ into mobile browsers and access to cloud gaming on mobile devices. It is also launching a ‘competition law investigation’ into Google’s rules governing apps’ access to listing on its Play Store, in particular regarding conditions artound in-app payments. There is already a competition law investigation underway in relation to Apple’s App Store terms and conditions, which it opened in March 2021.

With regards to mobile browser engines, which is not the same as a browser app, the CMA says Apple bans alternatives to its own browser engineson its mobile devices, which ‘severely limits the potential for rival browsers to differentiate themselves from Safari‘, as well as the capability of web apps.  The regulator also doesn’t like the fact phones typically have either Google’s Chrome or Apple’s Safari pre-installed and set as default, which it says gives them another advantage over rival browsers.

On cloud gaming, it reckons Apple has blocked the emergence of cloud gaming services on its App Store, and that /by preventing this sector from growing, Apple risks causing mobile users to miss out on the full benefits of cloud gaming.’

“When it comes to how people use mobile phones, Apple and Google hold all the cards,” said Andrea Coscelli, Chief Executive of the CMA. “As good as many of their services and products are, their strong grip on mobile ecosystems allows them to shut out competitors, holding back the British tech sector and limiting choice. We all rely on browsers to use the internet on our phones, and the engines that make them work have a huge bearing on what we can see and do. Right now, choice in this space is severely limited and that has real impacts – preventing innovation and reducing competition from web apps. We need to give innovative tech firms, many of which are ambitious start-ups, a fair chance to compete.

“We have always been clear that we will maximise the use of our current tools while we await legislation for the new digital regime. Today’s announcements – alongside the 8 cases currently open against major players in the tech industry, ranging from tackling fake reviews to addressing problems in online advertising – are proof of that in action.”

The proposed market investigation will weigh up the concerns it has laid out and dictate if any action is to be taken, such as making legally binding orders requiring changes to be made to Apple’s and Google’s practices.

 

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