CMA fears Apple and Google duopoly impacts competition

Britain’s Competition and Markets Authority, which launched a probe earlier in 2021 over concerns that Apple and Google-parent company Alphabet held too much control over operating systems, app stores and web browsers, said on Tuesday that it fears the groups’ duopoly may be leading to less competition and meaningful choice for customers.
The CMA said it believes people appear to be missing out on the full benefit of innovative new products and services due to the duo’s “vice-like grip” over the space and said it was also concerned that consumers could be facing higher prices than they would in “a more competitive market”.

CMA chief executive Andrea Coscelli said: “Apple and Google have developed a vice-like grip over how we use mobile phones and we’re concerned that it’s causing millions of people across the UK to lose out. Most people know that Apple and Google are the main players when it comes to choosing a phone.

“But it can be easy to forget that they set all the rules too – from determining which apps are available on their app stores, to making it difficult for us to switch to alternative browsers on our phones. This control can limit innovation and choice, and lead to higher prices – none of which is good news for users.”

The CMA said it had provisionally found that Apple and Google had been able to leverage their market power to create largely self-contained ecosystems, making it “extremely difficult” for any other firm to enter and “compete meaningfully” with a new system.

As a result, the CMA set out a range of actions that it believes could be taken to address the issues, including making it easier for users to switch between iOS and Android phones when they want to replace their device without losing functionality or data, making it easier to install apps through methods other than the App Store or Play Store, including so-called “web apps”, enabling all apps to give users a choice of how they pay in-app for things like game credits or subscriptions, rather than being tied to Apple’s and Google’s payment systems and making it easier for users to choose alternatives to Apple and Google for services like browsers, in particular by making sure they can easily set which browser they have as default.

The watchdog thinks the best way to address these actions will be through the Digital Markets Unit, when it receives powers from government, with its work so far suggesting, that Apple and Google would meet the criteria for “Strategic Market Status” designation for several of its ecosystem activities, as set out in Downing Street’s recent proposals to create “a new pro-competition regime for digital markets”.

If its proposals become law, the CMA’s Digital Markets Unit will ultimately be responsible for deciding which big tech firms get SMS status, which will result in the companies facing “legally enforceable codes of conduct” to govern behaviour and prevent them from “exploiting their powerful positions”.

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