Apple and Google could be strong-armed into making changes to their mobile platforms, known as iOS and Android. These Californian behemoths might be required to revise key aspects of how their mobile platforms operate, including the handling of app reviews and in-app payments, the ranking of apps and games in digital storefronts, the distribution of web browsers, and the ease with which users can move between platforms.
That's because the UK competition watchdog, the Competition and Markets Authority (CMA), recently confirmed that both tech giants now have what's called "strategic market status" for their mobile platforms.
This status means a company has been found to have substantial and entrenched market power, significant size, scale or influence in terms of its digital activity. They must also have turnover of more than £1 billion in the UK or £25 billion globally.
Around 90% to 100% of UK mobile devices run on Apple or Google’s mobile platforms, according to the CMA.
This designation covers everything from the operating systems that power our phones and tablets to the way we download apps and browse the internet. It’s part of the new rules introduced at the start of this year to promote fairness in digital markets. Once this status is granted, the CMA has the authority to step in when necessary to ensure competition in the mobile ecosystem remains healthy.
The ruling comes just a few weeks after Apple's Senior Vice President of Worldwide Marketing, Greg Joswiak, told GB News that bringing EU-style rules to the UK will hamper innovation. Cutting-edge new features have been "delayed, watered down", or scuppered entirely by "bureaucrats in Brussels," the executive told us.
Apple may need to change how apps are ranked in storefront searches, how browsers are distributed, and how easily you can switch across platforms
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Will Hayter, who leads digital markets at the CMA, pointed out that the platforms' rules might be holding back innovation and competition. He said: "The app economy generates 1.5% of the UK’s GDP and supports around 400,000 jobs, which is why it’s crucial these markets work well for business so they can invest, innovate and drive the growth this country needs.
"Apple and Google’s mobile platforms are used by thousands of businesses right across the economy to market and sell products and services to millions of customers, but the platforms’ rules may be limiting innovation and competition.
"Having taken into account the feedback received since our proposed decision, we have today designated Apple and Google’s mobile platforms with strategic market status."
This comes as the CMA is considering tougher EU-style rules, which it claims will boost competition for UK businesses and choice for consumers. Following the UK's departure from the European Union, it's able to determine its own rules, so there's no obligation to be in alignment with the Digital Markets Act (DMA).
An earlier study from the CMA, published in 2021, found that Apple and Google dominated mobile ecosystems across operating systems, app stores, and web browsers with software like Safari and Google Chrome. It concluded that these two companies were in a position to effectively set the rules on how mobile browsers worked on their devices.
Chief Executive of the regulator, Sarah Cardell said: “Apple and Google’s mobile platforms are both critical to the UK economy – playing an important role in all our lives, from banking and shopping to entertainment and education. But our investigation so far has identified opportunities for more innovation and choice.”
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Sarah Cardell, Chief Executive of the Competition and Markets Authority (CMA), pictured speaking during a panel discussion at the Annual CBI Conference | GETTY IMAGES The watchdog started looking into both companies back in January and suggested in July that they should get this special designation. Since then, they've heard from more than 150 different groups and had discussions with both Apple and Google.
What they found is that both companies have serious, well-established power in their markets and hold positions of major importance.
Around 90% to 100% of UK mobile devices run on Apple or Google’s mobile platforms, according to the CMA. The investigation showed that people tend to stick with either Apple or Android and rarely switch between them. It also found people are unlikely to switch between the two devices, remaining either an Apple or Android user.
Rocio Concha, Which? Director of Policy and Advocacy responded to this ruling, stating: "Smartphones are integral to our everyday lives — for work, shopping, keeping in touch and much more — and the average UK adult spends more than 3 hours a day on their mobile. But much of what we do on our mobile is influenced by Apple and Google's enduring duopoly and their dominance is now causing real harm by restricting choice for consumers and competition for businesses.
"We can see that curbs on their power in other countries are already helping businesses to innovate and giving consumers more choice. It's essential that the CMA is able to introduce similar measures so that UK consumers aren't left behind."
The CMA reckons Apple and Google's grip on the market isn't going anywhere for at least the next five years either.
| GETTY IMAGES A separate investigation into Google found that it had dominance over the market with its search engine services, including Chrome.
That decision from earlier this month marked the first time the CMA had used its new powers to designate a tech firm with the strategic market status.
Oliver Bethell, Google’s senior competition director, criticised the watchdog’s decision as “disappointing, disproportionate and unwarranted.”
“The UK’s new digital markets regime was introduced with the promise of being pro-growth and pro-innovation, with the CMA emphasising that its work would be highly targeted and proportionate,” he said.
“In this context, we simply do not see the rationale for today’s designation decision.”
Mr Bethell also said that there are 24,000 Android phone models from 1,300 phone manufacturers worldwide, “facing intense competition” from the iOS system in the UK.
A spokeswoman for Apple also responded, stating: “Apple faces fierce competition in every market where we operate and we work tirelessly to create the best products, services and user experience.
“The UK’s adoption of EU-style rules would undermine that, leaving users with weaker privacy and security, delayed access to new features, and a fragmented, less seamless experience.
“We’ve seen the impact of regulation on Apple users in the EU and we urge the UK not to follow the same path.”
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