Google and Apple face extra UK scrutiny over 'strategic' role in mobile platforms

Key Points

• The UK's Competition and Markets Authority (CMA) is targeting Google and Apple for their "strategic market status," which may lead to changes in their business practices to enhance competition in mobile ecosystems.
• The CMA has highlighted a range of concerns, including the companies' duopoly in the UK market, unpredictable app reviews, and high commissions on in-app purchases.
• Following the designation, the CMA has proposed measures such as fair app reviews, transparent app store rankings, and allowing developers to direct users to alternative purchasing options outside of app stores.
• Both companies have expressed concerns about the CMA's actions, with Google calling the decision "disappointing" and Apple warning that it might undermine user security and the developer economy in the UK.

LONDON (AP) — Britain’s antitrust watchdog on Wednesday targeted Google and Apple for their “strategic” roles in mobile ecosystems, opening the door for regulators to impose changes to their business practices to improve competition.

The Competition and Markets Authority escalated scrutiny of the two U.S. tech companies by labeling them with “strategic market status.” It follows separate investigations that the CMA opened at the start of the year into Google’s Android and Apple’s iOS using newly acquired digital market regulations designed to protect consumers and businesses from unfair practices by Big Tech companies.

The regulator's decision was expected. It proposed the classifications in July but sought feedback before releasing its final decision.

Google called the decision “disappointing, disproportionate and unwarranted," and has contended previously that Android has saved app developers money because they didn’t have to adapt to different operating models for each smartphone.

“Following the CMA’s decision today, our mobile business in the UK faces a set of new – and, as of yet, uncertain – rules," said Oliver Bethell, senior competition director at Google. "The CMA’s next steps will be crucial if the UK’s digital markets regime is to meet its promise of being pro-growth and pro-innovation.”

Google was already given the “strategic market status” designation earlier this month, when the CMA wielded its new powers for the first time by targeting the company's role in a separate investigation into the online search advertising market.

The CMA says being labeled with “strategic market status” doesn’t imply any wrongdoing. But it means the watchdog has the power to use targeted measures to open up competition and ensure consumers and businesses are treated fairly.

The watchdog has said Apple and Google hold an “effective duopoly,” with 90-100% of mobile devices in Britain running on either mobile platform. Its investigation found a range of concerns affecting businesses and consumers such as unpredictable app reviews, inconsistent app store search rankings and commissions on in-app purchases of as much as 30%.

The CMA had unveiled separate “road maps” for each company outlining possible measures to improve competition, including “fair and transparent” app reviews and app store rankings to give British app developers “certainty.”

The watchdog had also recommended letting app developers “steer” users to channels outside of app stores where users can make purchases, mirroring similar efforts by the European Union.

Apple has said it was worried the CMA’s moves could pose increase risks for users and jeopardize the U.K.’s “developer economy.”