“Apple and Google hold all cards”
Government of the United Kingdom Competition and market authority (CMA) has released the final report of the investigation into the mobile ecosystem. The report examines the respective business models of Apple and Google and concludes that both companies are actively limiting competition in their respective markets to the detriment of their customers. Going forward, the CMA said it was launching a market investigation into Apple this July and was going to take action against Google.
“When it comes to how people use mobile phones, Apple and Google hold all the cards. As good as many of their services and products are, their strong hold on the mobile ecosystem allows them to outperform their competitors, stifle the British tech sector and limit choices, “said Andrea Coselli, CMA’s chief executive.
The CMA launched its official investigation a year ago to gather evidence to better understand this key component of the digital economy and to evaluate whether competition is working well for consumers and citizens in the UK.
The company offered its preliminary results in December 2021 It marks the final release of the report, which also offers possible mitigation and steps to follow the government.
“… Our findings contribute to a broader work program, including the establishment of a new pro-competition regulatory system for the digital market in the UK and our active competition and consumer application,” the group said.
Much of the 356-page report details how Apple and Google make money from their respective mobile ecosystems: Apple makes money by selling devices through advertising, Google. Examples of reports are how native apps are distributed across each platform, mobile browser and browser engine competition, how Apple and Google affect app competition, and more.
The CMA said its investigation found specific examples of how both Apple and Google imposed restrictions that weakened competition or “potentially disrupted innovation”.
“Weak competition between and between Apple and Google’s mobile ecosystem is hurting consumers, and it will do more in the case of missing interventions in the future,” the report reads.
The CMA says consumers are missing out on disruptive technologies and new features that may come to market in the absence of these artificial restrictions that both Apple and Google impose on their respective mobile device ecosystems. And while the CMA acknowledges that Apple and Google have a responsibility to protect the privacy and security of users, “it does not provide a strong automatic right to block competition or restrict user choice. Nor does it mean that well-designed interventions to promote greater competition cannot be introduced. “
The CMA lists several possible interventions that it says will address the issue raised. Among them, the company thinks side-loading or opening an alternative app store is a move – a move for which some European regulatory authorities are already penalizing Apple for not complying. Apple, for its part, claims that doing so poses an unacceptable security risk to its customers.
“… The evidence we have gathered so far shows that there is an opportunity to remove many of these without compromising the safety and security of the people,” they concluded.
The CMA’s next step is to investigate in more detail the market impact of Apple and Google in mobile browsers, and another is Apple’s restrictions on supporting cloud gaming apps in the App Store. What’s more, the CMA said Google’s rules for the Play Store app listing could follow the UK’s anti-competition laws. It promises further investigation and implementation.