Apple and Google app stores come under CMA scrutiny

The Competition and Markets Authority (CMA) has begun an investigation of the Apple and Google mobile ecosystems.

This is the second strategic market status (SMS) investigation that separately covers Apple and Google. Earlier in January,  the CMA said it has started an investigation seeking to determine if Google has strategic market status in search and search advertising activities, and whether these services are delivering good outcomes for people and businesses in the UK.

The CMA said that it is now looking at the two mobile tech giants because virtually all mobile devices sold in the UK are pre-installed with either Apple iOS or Google Android. Apple’s App Store and Google Play on Android devices have, the CMA said, either exclusive or leading positions on their platforms compared to alternative products and services.

“This means Apple and Google are also able to exert considerable influence over much of the content, services and technological development provided on a mobile device,” the CMA said.

The CMA’s investigation is looking at whether there is effective competition to ensure consumers and businesses are treated fairly by Apple and Google in relation to the terms and conditions they impose.

Computer Weekly previously spoke to a number of app developers who complained about the unfair pricing and technology restrictions Apple and Google imposed on them. With effective competition, the CMA said, businesses could deliver a range of content, services and technological developments to mobile device users. 
 
Among the areas the CMA plans to look into is 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.

Other areas covered by the investigation include Apple’s and Google’s market power into other activities. The CMA said this will look at 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. The CMA also plans to assess whether there is sufficient competition between the two rival mobile ecosystem providers.

Sarah Cardell, chief executive of the CMA, said: “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.” Cardell believes the UK economy benefits if businesses are not prevented from offering new and innovative types of products and services on Apple’s and Google’s platforms.

Commenting on the CMA’s latest investigations, Alex Haffner, a competition partner at Fladgate, noted that since the Digital Markets, Competition and Consumer (DMCC) Act 2024 was passed into legislation, the tech giants have fallen under the CMA’s regulatory remit.

“What is more interesting is how this fits into the current sea change which is engulfing the broader organisation of the CMA and, in particular, the very clear steer it is getting from central government to ensure that regulation is consistently applied with its pro-growth agenda,” he said.

“We can expect this to feature heavily once the CMA gets its teeth stuck into the specifics of the DMCC regime and its dealings with the tech companies involved.”