Apple and Google have too much power over phones and action is needed, UK watchdog says

Apple and Google have too much power over the phone market and action is needed to stop them taking over even more, the UK’s Competition and Markets Authority has said.

The watchdog is seeking ways to address the company’s “duopoly” amid fear that the two could become even more dominant, it announced as it published a final report into the two companies after a year of research.

The CMA said that the two companies have a “stranglehold” on the market that is limiting people’s choice, it said. It pointed to the way that they are able to use their ecosystems to promote their own services, pushing out other options.

In particular, it pointed to mobile browsers and cloud gaming as three ways it claimed the companies have been able to use their dominance to unfairly shut out competitors.

Apple, for instance, bans alternatives to its own browsing engine on its phones, making it much harder for other apps to distinguish themselves from the in-built Safari browser. And it has also blocked cloud gaming apps from the App Store, which the CMA said will prevent the sector from growing and means customers risk missing out on the full benefits of the technology.

The CMA also launched an investigation into Google’s Play Store, and how it is able to set conditions on how customers can make in-app purchases. It already has a similar investigation running into Apple’s practices, which began in March 2021.

It said that some responses will require political changes, and identified them in its report. But the CMA will be looking at more immediate ways of addressing the situation using the powers it already has, it said.

“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 eight 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.”

Apple said that it “respectfully disagrees” with some of the findings in the report, and that it hoped to convince the CMA that its approach was actually positive for customers.

“We believe in thriving and competitive markets where innovation can flourish. Through the Apple ecosystem we have created a safe and trusted experience users love and a great business opportunity for developers. In the UK alone, the iOS app economy supports hundreds of thousands of jobs and makes it possible for developers big and small to reach customers around the world,” it said. “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. We will continue to engage constructively with the Competition and Markets Authority to explain how our approach promotes competition and choice, while ensuring consumers’ privacy and security are always protected.”