CMA closes Apple and Google probes but they're not off the hook

Under the Digital Markets, Competition and Consumers (DMCC) act, the CMA will be able to designate tech giants as having 'strategic market status' (SMS) in respect to their operations, whether that's online search, cloud services, e-commerce or indeed mobile app stores.

Broadly speaking this aspect of the law is similar to the EU's Digital Markets Act (DMA), which gave regulators the power to designate Google parent Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft as so-called gatekeepers to the various markets in which they operate.

Under the UK's version, companies that meet the SMS threshold are subject to more stringent rules regarding their business practices. It became law in May after receiving Royal Assent, and is due to come into force in the autumn.

The CMA is so keen to take these new powers out for a spin that it has decided to can its parallel investigations into Google and Apple. They were launched under the Competition Act due to concerns that these two "are using their market positions via the Play Store and App Store respectively to set terms which may be unfair to UK app developers, and which may restrict competition and consumer choice, potentially leading to higher prices and reduced choice for app users."

More specifically, the cases centred on rules requiring developers to us Google and Apple's own billing systems for in-app purchases, limiting developers' choices of payment solution and making it more difficult to deal directly with consumers.

Incidentally, just before the probes were shelved, the CMA actually rejected commitments proposed by Google that would have allowed app developers to use rival payment providers. Feedback submitted to the CMA by developers raised concerns about the commission they would still have to pay Google, and the number of pop-up screens that would confront users trying to make a purchase through a competing provider.

With this being the case, it seems more than likely that the CMA will be keen to resume its close scrutiny of Google and Apple as soon as the new law takes effect.

With the power of the DMCC behind it, the CMA said that in the event that Apple and Google are given the SMS designation, the watchdog "will be able to use its new powers to consider the range of issues raised by parties more holistically than it otherwise could."

It was also keen to stress that closing these cases on the grounds of what it calls administrative priority does not prevent, pre-judge or fetter the CMA's ability to open a new investigation further down the line.

As for any remedies that might eventually be employed, the DMCC grants the CMA the power to establish 'conduct requirements' tailored to designated entities that would force them to change the way they operate if they are found to be treating users unfairly.

The DMCC also gives the regulator powers to intervene and direct a firm to change its behaviour to boost competition.

Non-compliance can potentially lead to fines reaching to tens of billions of pounds.

With the DMCC, the UK is set to join the EU, South Korea, Japan and to a certain degree the US in taking a tougher approach to curbing big tech's dominance of online services. A more coordinated, global response is probably the best chance of getting these sprawling behemoths to fall into line.