“Apple and Google hold all the cards”
The U.K. government’s Competition and Markets Authority (CMA) has published the final report of its investigation into the mobile ecosystem. The report examines Apple and Google’s respective business models and concludes that both companies are actively limiting competition in their respective markets to the detriment of their customers. Going forward, the CMA said it is launching a market investigation into Apple this July, and is going to enforce action against Google.
“When it comes to how people use mobile phones, Apple and Google hold all the cards. 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,” said Andrea Coscelli, Chief Executive of the CMA.
The CMA launched its official inquiry a year ago with the intent of better understanding this “major component of the digital economy, and to gather evidence to inform an assessment of whether competition is working well for consumers and citizens in the UK.”
The agency offered its preliminary findings in December 2021. This marks the report’s final publication, which also offers potential mitigations and steps forward for the government to pursue.
“…our conclusions are contributing towards a broader programme of work, which includes the establishment of a new pro- competition regulatory regime for digital markets in the UK, and our active competition and consumer enforcement work,” said the group.
Much of the 356-page report outlines in detail how Apple and Google make money off their respective mobile ecosystems: Apple makes money selling devices, Google through advertising. The report examples how native apps on each platform are distributed, mobile browser and browser engine competition, how Apple and Google influence app competition, and more.
The CMA said their investigation found specific examples of how Apple and Google both impose restrictions which weakens competition or holds back “potentially disruptive innovations.”
“Weak competition within and between Apple’s and Google’s mobile ecosystems is harming consumers, and will do to a greater degree in future absent intervention,” reads the report.
The CMA says that consumers are missing out on disruptive technology and new features which could come to market absent of some of these artificial restrictions which Apple and Google both impose on their respective mobile device ecosystems. And while the CMA acknowledges Apple and Google have a responsibility to protect user privacy and security, “this does not give either firm an automatic right to block competition or restrict user choice. Nor does it necessarily mean that well-designed interventions cannot be introduced to promote greater competition.”
The CMA lists several potential interventions which it says will address the issue it’s raised. Among them, the organization thinks opening up side-loading or alternative app stores is the way to go — a move for which some European regulatory authorities are already fining Apple for not complying. Apple, for its part, claims that doing so is an unacceptable security risk to its customers.
“…the evidence we have gathered to date suggests there is scope for removing many of these without compromising people’s safety and security,” they concluded.
The CMA’s next step is to perform a more detailed investigation into Apple and Google’s market influence on mobile browsers, and another into Apple’s restrictions on supporting cloud gaming apps on its App Store. What’s more, the CMA said Google’s rules for Play Store app listing may run askew of U.K. anti-competition laws. It promises more investigation and enforcement to come.
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