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The United Kingdom’s Competition and Markets Authority (CMA) on Friday said it intends to launch an investigation of Apple’s and Google’s market power with respect to mobile browsers and cloud gaming, and to take enforcement action against Google for its app store payment practices.

“When it comes to how people use mobile phones, Apple and Google hold all the cards,” said Andrea Coscelli, Chief Executive of the CMA, in a statement. “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 decision to open a formal investigation follows the CMA’s year-long study of the mobile ecosystem. The competition watchdog’s findings have been published in a report that concludes Apple and Google have a duopoly that limits competition.

“We have found that Apple and Google have substantial and entrenched market power in mobile operating systems as there is limited effective competition between the two and rivals face significant barriers to entry and expansion,” the final report [PDF] says.

This is the third Google-oriented inquiry by the CMA this year. In March, the CMA and the EU announced an investigation of Google and Meta (Facebook) of an alleged ad collusion called Jedi Blue. And the CMA said it is looking into Google ad tech last month as well.

The CMA in March, 2021 opened competition law investigation into the terms and conditions governing Apple’s App Store.

Back in March, 2022 when the CMA was still accepting input from tech firms on how it should proceed, Apple urged the UK regulator to look past the “often self-serving complaints from a limited number of the largest market participants,” as Apple’s law firm Gibson Dunn put it.

Google also maintained that the status quo works well [PDF] while taking issue with some of the CMA’s findings. Asked to comment, a Google spokesperson said the company is considering the final report and will continue to engage with the CMA – as if the alternative, ignoring authorities until they break down the doors, were a viable option.

“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,” a Google spokesperson said. “We regularly review how we can best support developers and have reacted quickly to CMA feedback in the past.”

Apple did not respond to a request for comment.

Setting the limits

The UK earlier this year delayed defining the statutory powers of the Digital Markets Unit, which was set up within CMA last year to oversee big tech. That leaves the CMA to pursue these matters to the extent allowed under its own powers, at least until such time as the DMU’s role has been defined.

The investigations of Apple and Google in the UK coincide with numerous competition inquiries by other countries, as well as legislation and lawsuits. South Korea has required Apple and Google to allow third-party in-app payment vendors. The Netherlands has taken similar steps specifically for dating apps. Japan’s Fair Trade Commission has forced Apple to allow reader apps to take payments outside the App Store and last year began looking into anticompetitive behavior in the mobile ecosystem, focused on Apple and Google.

Various bills that would regulate Apple and Google, among others, are being considered by US lawmakers and the Justice Department is pursuing an antitrust case against Google over its ad business, as are a number of US state Attorneys General.

The EU’s Digital Markets Act and Digital Services Act contain new rules designed to foster competition, like disallowing Apple’s iOS requirement that all mobile browsers within its App Store be based on the company’s WebKit engine.

The UK’s CMA also expressed interest in addressing competition issues related to web technology, specifically the unfairness of private browser APIs, browser engine diversity, and ensuring web apps can implement the same capabilities as native apps.

“There is a strong case for requiring a level playing field between Apple’s browser (Safari) and third-party browser apps, regardless of whether the WebKit restriction is removed,” the final report says. “We would therefore expect that there should be comparable API access between Safari and other browsers using WebKit.”

“There is also a strong general case for a level playing field between the functionality availability to native app developers and web app developers. Following the removal of the WebKit restriction, competition may help to drive up standards on iOS, but there may continue to be some features that would continue to be restricted within iOS or Android, and in some cases there may be a good case for requiring parity with the treatment of native apps.”

In a blog post, Tom Smith, an attorney with Geradin Partners, a competition law firm based in London and Brussels, argues that CMA appears to have made a sound choice by focusing on narrow aspects of the mobile ecosystem rather than trying to rewrite the rules of app stores in one go.

“It seems at first glance that browsers and cloud gaming are a clever choice for intervention,” said Smith. “They are areas where the CMA can add value because they have not been the subject of detailed scrutiny internationally, and the CMA clearly has some targeted remedies in mind that it believes it can impose successfully.”

Japanese authorities, in the recent Competition Assessment of the Mobile Ecosystem Interim Report Summary, are also considering abolishing Apple’s iOS browser restrictions.

“It may be possible to introduce a rule that prohibits an OS provider from obliging third-party browser providers to use a particular browser engine,” the report [PDF] says.



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