Apple, Google Face UK Antitrust Probe Into Mobile Ecosystem Power

UK regulators on Thursday launched an investigation into Apple and Google's smartphone ecosystems to assess whether they have "strategic market status" (SMS), a designation that if imposed would subject the companies to specific conduct requirements set by the Competition and Markets authority (CMA) to improve competition.

app store blue banner uk fixed
The investigation will look at the companies' operating systems, app stores and browsers that operate on mobile devices, and the impact they have on users and on businesses developing content and services such as apps for iOS and Android devices. According to the CMA's press release, the issues that will form part of the CMA's investigations include:

  • The extent of competition between and within Apple's and Google's mobile ecosystems. The CMA will assess how competition is working across Apple's and Google's mobile ecosystems and what barriers may be preventing other competitors from offering rival products and services on Apple's and Google's platforms.
  • Possible leveraging of Apple's and Google's market power into other activities. This will include investigating whether Apple or Google are using their position in operating systems, app distribution or browsers to favour their own apps and services, which often come pre-installed and prominently placed on iOS and Android devices.
  • Potential exploitative conduct. This will include investigating whether Apple or Google are requiring app developers to sign up to unfair terms and conditions as a condition of distributing their apps on Apple's and Google's app stores; and whether users may be presented with 'choice architecture' which makes it difficult to make active choices about which apps they are using on mobile devices.

If deemed to have SMS designation, the potential conduct requirements the companies would have to comply with could include, for example, requiring Apple or Google to open up access to key functionality needed by other apps to operate on mobile devices, or making it possible for users to download apps and pay for in-app content more easily outside of Apple's and Google's own app stores.

Sarah Cardell, chief executive of the CMA, said:

"The operating systems, apps and browsers installed on our phones and tablet devices act as our gateway into the digital world – whether that is communicating with our friends and loved ones, buying from businesses or accessing creative content.

"More competitive mobile ecosystems could foster new innovations and new opportunities across a range of services that millions of people use, be they app stores, browsers or operating systems. Better competition could also boost growth here in the UK, with businesses able to offer new and innovative types of products and services on Apple's and Google's platforms."

This is the second announced SMS investigation in as many weeks, the first of which is looking into Google Search's approximately 90% market share. The CMA said at the time that a second one would be coming this month, and now we have it. The CMA can impose significant fines for non-compliance, including up to 1% of a firm's annual worldwide turnover, with additional penalties for continued noncompliance. Individuals in senior management positions may also face fines or disqualification from serving as directors.

The probe will take no more than nine months, and the statutory deadline for both investigations is October 22, 2025. The investigations are separate to the CMA's ongoing market investigation into mobile browser and cloud gaming restrictions put in place by both Apple and Google.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

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Top Rated Comments

wanha Avatar
9 months ago

Can we please have an investigation into the lack of competition at the operating system level? Any lack of competition on the existing platforms themselves is pointless to investigate until we have established and rectified the issues at the operating system level.
It's the nature of the OS market to want to consolidate around few operating systems, because network effects are the key to their vitality.

Without a large enough user base, you can't attract developers. And you can't attract customers unless you have enough apps and services (which require developers).

It's a chicken and egg problem that exists on such a scale that it is extremely difficult to solve.

Microsoft spent billions trying to buy their way into the smart phone OS market with the purchase of Nokia and paying developers to port their apps onto Windows Phone (which was pretty good) but they still failed miserably.
Score: 15 Votes (Like | Disagree)
rp2011 Avatar
9 months ago

Can we please have an investigation into the lack of competition at the operating system level? Any lack of competition on the existing platforms themselves is pointless to investigate until we have established and rectified the issues at the operating system level.
While we are at it, launch an investigation into why UK citizens choose Apple or Google instead of a home grown product. Then launch an investigation on why and how the UK government cannot foster innovation. I mean to REALLY get to the bottom of things.
Score: 9 Votes (Like | Disagree)
mrochester Avatar
9 months ago
Can we please have an investigation into the lack of competition at the operating system level? Any lack of competition on the existing platforms themselves is pointless to investigate until we have established and rectified the issues at the operating system level.
Score: 8 Votes (Like | Disagree)
Camusrieux Avatar
9 months ago

I should be able to plug my iPhone (or any other such device) into a computer, and without contacting Apple, or getting approval, blow away the OS to bare hardware without Apple's artifical countermeasures trying to prevent me.
It’s interesting that you happen to believe (based on a theory of moral obligation that remains obscure) that you are entitled to have Apple design and manufacture such a product and make it available to you, but in point of fact the company clearly is not interested in doing so.

You are of course welcome to purchase a smartphone from another company that provides you with the “blow away the OS to bare hardware” feature that you desire. More than that, you are welcome to boycott Apple and its products and services entirely. But your ability to make arbitrary demands that the company design its products to suit your tastes is limited to your power to force them to do so. And as far as any of us here can tell, you have no such power at all.
Score: 7 Votes (Like | Disagree)
10anta Avatar
9 months ago
As a Brit I feel the need to apologise for the sheer stupidity of a regulator trying to magic a tech competitor and compelling app ecosystem into being through the courts.
Score: 6 Votes (Like | Disagree)
Camusrieux Avatar
9 months ago

Government force is literally a not entirely metaphorical gun, so yeah I do agree that government intervention should be minimal at best. I also think pure capitalism doesn’t work well without some balancing regulation....
Oh, certainly. I'm not arguing that regulation is always worthless or malignant (to the contrary, in many industries at many times it's vital to society), or even that antitrust regulation is always bad.

But in a situation like this, in which every single thing that is allegedly objectionable about Apple's products could be cured if one of the several other behemoth technology companies simply designed and marketed competing products that consumers liked more, the case for government intervention in the market strikes me as flatly ludicrous.

Government stringently regulating the actions of an electric utility because no other firm could possibly afford to build an entirely new (and redundant) electricity-distribution system to compete with the present one makes all kinds of sense. But government demands that Apple fundamentally re-engineer its products because "I WANNA IPHONE I CAN JAILBREAK!" [flings dirty diaper, screams, pounds high chair with fists] is deranged. More to the point, it can only leave a huge number of consumers vastly worse off than we were before.
Score: 5 Votes (Like | Disagree)