The UK competition watchdog is considering launching an investigation into Apple and Google’s dominance of the mobile browser market after finding that the companies have a “stranglehold” on a range of areas including app stores.
The Competition and Markets Authority (CMA) indicated that action was needed, saying that otherwise the companies were likely to strengthen their grip on the sector, which would further restrict rivals and dissuade innovators.
Andrea Coscelli, the chief executive of the CMA, said the two firms’ dominance was holding back the UK tech sector and restricting consumer choice.
“When it comes to how people use mobile phones, Apple and Google hold all the cards,” he said. “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.”
The CMA said it was consulting on the launch of a market investigation into Apple and Google’s market power in mobile browsers after a year-long study of the companies’ mobile ecosystems, which it published on Friday.
It said the study found that Apple and Google have an “effective duopoly” on mobile ecosystems that gives them a stranglehold over areas including operating systems, app stores and web browsers on mobile devices.
The CMA said smartphones typically have either Google’s Chrome or Apple’s Safari pre-installed as their default browsers, with a combined market share of about 90% in the UK.
“Without interventions, both companies are likely to maintain, and even strengthen, their grip over the sector, further restricting competition and limiting incentives for innovators,” the watchdog said.
It accused Apple of blocking the emergence of cloud gaming – where video games are streamed rather than downloaded – on its app store and said it would consult on launching an investigation into that as well.
The CMA also said it was taking enforcement action against Google over its app store payment practices. The organisation said it was launching an investigation into how users can make in-app payments for digital services like gaming and subscriptions.
Apple said it believed in “thriving and competitive markets” and disagreed with a number of conclusions in the report that accompanied the CMA statement. It said: “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.”
Google said phones backed by its Android operating system and Google Play app store offered choice to consumers and helped developers launch global businesses.
It added: “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. We will review the report and continue to engage with the CMA.”
The CMA now has eight cases open against big tech companies including Facebook’s parent company and Amazon, although a new tech unit within the CMA, the Digital Markets Unit, has yet to receive statutory powers.
Miranda Cole, a competition partner at the law firm Norton Rose Fulbright, said: “The CMA is known to be frustrated that the legislation for the proposed new digital regulatory regime is taking longer than it had hoped, so is pushing ahead with cases using its existing tools in the meantime where it identifies potential concerns in digital markets.”
