Apple and Google have ‘stranglehold’ on mobile browser market, says UK watchdog

Competition authority launches investigation as part of crackdown on power of big tech

The UK competition regulator is planning an investigation into Apple and Google’s market power in phone browsers and cloud gaming following a year-long study that found the two companies had a “stranglehold” on the market.

The Competition and Markets Authority (CMA) is consulting on launching a market investigation that would give it sweeping powers to tackle Google and Apple’s dominance in mobile phone systems.

The move marks its latest crackdown against the power of Big Tech following recent investigations, including one into Google’s potential abuse of its dominance in ad tech.

CMA chief executive Andrea Coscelli said that 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,” he said.

Apple and Google “unilaterally determine” the “rules of the game” on mobile browsers and app stores, the CMA said, making it difficult for rivals to compete. Both companies had an “effective duopoly ... that allows them to exercise a stranglehold” over operating systems, apps and more.

The CMA’s findings come after it was dealt a blow in its efforts to tackle the dominance of big tech companies by the British government, which chose not to empower a new digital markets unit (DMU) in May. The DMU was launched in shadow form last year but cannot set bespoke rules for technology groups or police their behaviour without being put on a statutory footing.

A market investigation would enable the CMA to intervene in Apple and Google’s supply of mobile browsers and the distribution of cloud gaming services through their app stores and devices.

The regulator had initially backed away from the idea in its interim report, but received “several submissions” from parties “urging us to take action now”.

On Friday the CMA also launched enforcement action against Google over its app store rules, which mean app developers must pay for content using its own payment system, Google Play Billing. The CMA can fine companies up to 10 per cent of turnover for breaches of UK competition rules.

That investigation comes after the CMA launched an inquiry last year into Apple’s conduct in relation to the distribution of apps on its operating system and devices, in particular the terms and conditions that developers must sign up to — including a 30 per cent commission for Apple.

The CMA said in its final report that Apple and Google were depriving users and web developers of innovation and choice, noting that Apple prohibited rival app stores on its devices and blocked other ways to access services.

Apple said in a statement: “We respectfully disagree with a number of conclusions reached in the report, which discount our investments in innovation, privacy and user performance — all of which contribute to why users love iPhone and iPad and create a level playing field for small developers to compete on a trusted platform.”

Google said: “Android phones offer people and businesses more choice than any other mobile platform. Google Play has been the launchpad for millions of apps, helping developers create global businesses that support a quarter of a million jobs in the UK alone.”

Both Apple and Google said they would continue to engage with the CMA.

— Copyright The Financial Times Limited 2022