UK regulators have suggested Apple and Google hold a “vice-like” grip over how consumers use their smartphones and what content they are able to access, limiting competition and potentially increasing prices.
The Competitions and Markets Authority (CMA) launched an investigation into the market earlier this year to see if the two companies, which have an effective duopoly, had too much control over the operating system, app store, and web browser experience.
Its provisional findings state that when a person buys an iPhone or an Android device, they are effectively tied into that ecosystem with little choice but to participate if they want to benefit from the full functionality of their handset.
Apple App Store investigation
Apple’s iOS is effectively a closed shop with no third-party application stores permitted, while Google benefits from pre-installed applications as per the terms of its arrangements with vendor partners.
Both stores charge app developers commission on sales, arguing that this was necessary to maintain quality and security. In Apple’s case, the App Store is the only way to distribute applications on iOS, meaning it has a huge amount of control over the type of software that can be used.
The CMA says this in effect means the two companies leverage their market power to create barriers to entry and force consumer and developers to work within their respective frameworks.
“Apple and Google have developed a vice-like grip over how we use mobile phones and we’re concerned that it’s causing millions of people across the UK to lose out,” said Andrea Coscelli, chief executive of the CMA.
“Most people know that Apple and Google are the main players when it comes to choosing a phone. But it can be easy to forget that they set all the rules too – from determining which apps are available on their app stores, to making it difficult for us to switch to alternative browsers on our phones. This control can limit innovation and choice, and lead to higher prices – none of which is good news for users.
“Any intervention must tackle the firms’ substantial market power across the key areas of operating systems, app stores and browsers. We think that the best way to do this is through the Digital Markets Unit when it receives powers from government.”
Potential remedies include making it easier to switch between iOS and Android without losing data or functionality, the ability to install applications without using the App Store or Google Play, and the ability for developers to offer alternative payment systems to the ones uses by the two companies. The CMA also wants to make it easier to choose an alternative browser to Safari or Chrome.
Many technology firms have become the subject of probes by European regulators in recent times, with authorities increasingly aware of the role and influence of digital services on both the economy and society.
“Apple believes in thriving and dynamic markets where innovation can flourish. We face intense competition in every segment in which we operate, and our North Star is always the trust of our users. We will continue to create new opportunities for developers while protecting our user’s privacy and security,” the company told TechRadar Pro.
“Our rules and guidelines are constantly evolving, and we have made many recent changes that benefit developers and consumers alike. We will continue to engage constructively with the UK Competition and Markets Authority as their work on this study progresses.”
“Android provides people with more choice than any other mobile platform in deciding which apps and app stores they use. The Android app ecosystem also supports nearly a quarter of a million jobs across thousands of app developer and phone maker businesses in the UK,” a Google spokesperson told TechRadar Pro.
“At Google we regularly review how we can best support these businesses – for example – as a result of recent changes, 99% of developers qualify for a service fee of 15% or less. We’re committed to building thriving, open platforms that empower consumers and help developers succeed.”