Apple and Google app stores come under CMA scrutiny

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

This marks the second strategic market status (SMS) investigation focusing separately on Apple and Google. Earlier in January, the CMA announced an investigation to determine if Google holds strategic market status in search and search advertising activities, and whether these services are providing positive outcomes for individuals and businesses in the UK.

The CMA explained that the investigation now includes the two major mobile tech companies because nearly all mobile devices sold in the UK come pre-installed with either Apple iOS or Google Android. The CMA noted that Apple’s App Store and Google Play on Android devices hold exclusive or leading positions on their platforms compared to alternative products and services.

“This gives Apple and Google significant influence over the content, services, and technological advancements available on mobile devices,” stated the CMA.

The CMA’s inquiry aims to determine if there is sufficient competition to ensure fair treatment of consumers and businesses by Apple and Google regarding the terms and conditions they enforce.

Computer Weekly previously interviewed several app developers who raised concerns about the unfair pricing and technology restrictions imposed by Apple and Google. The CMA emphasized that with effective competition, businesses could offer a variety of content, services, and technological advancements to mobile device users.

One aspect the CMA plans to investigate is whether Apple or Google are imposing unfair terms and conditions on app developers as a requirement for distributing their apps through Apple’s and Google’s app stores.

Other areas under scrutiny include Apple’s and Google’s market dominance in various activities. The CMA will assess if Apple or Google are leveraging their position in operating systems, app distribution, or browsers to promote their own apps and services, which are often pre-installed and prominently featured on iOS and Android devices. The CMA also intends to evaluate the level of competition between the two competing mobile ecosystem providers.

Sarah Cardell, the CEO of the CMA, stated, “More competitive mobile ecosystems could lead to new innovations and opportunities across a range of services that millions of people utilize, whether it be app stores, browsers, or operating systems.” Cardell believes that the UK economy benefits when businesses are not hindered from offering new and innovative products and services on Apple’s and Google’s platforms.

Commenting on the CMA’s recent investigations, Alex Haffner, a competition partner at Fladgate, highlighted that since the passage of the Digital Markets, Competition and Consumer (DMCC) Act 2024, the tech giants have come under the regulatory purview of the CMA.

“What is particularly intriguing is how this aligns with the ongoing transformation within the broader structure of the CMA and the clear directive it is receiving from the central government to ensure consistent application of regulation in line with its pro-growth agenda,” he remarked.

“We can anticipate this becoming a focal point once the CMA delves into the specifics of the DMCC regime and its interactions with the tech companies involved.”