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LONDON — Britain’s competition regulator on Thursday launched an investigation into the massive mobile ecosystems of Apple and Google to determine whether the tech titans are breaking Britain’s tough new digital competition rules.
Britain’s Competition and Markets Authority said it was opening twin investigations into both US tech giants to assess whether they have “strategic market position” in their mobile ecosystems, including operating systems, app stores and browsers on smartphones.
The investigations will “examine the impact on people who use mobile devices and the thousands of businesses that develop innovative services or content such as apps for these devices.” CMA said.
“Apple believes in thriving and dynamic markets where innovation can flourish,” an Apple spokesperson told CNBC. “We face competition in every segment and jurisdiction where we operate, and we are always focused on the trust of our users.”
“In the UK alone, the iOS app economy supports hundreds of thousands of jobs and enables developers big and small to reach users on a trusted platform,” added an Apple spokesperson. “We will continue to engage constructively with the CMA as their work on this matter progresses.”
Oliver Bethell, Google’s senior director of competition, said the company’s Android platform “has helped expand choice, lower prices and democratize access to smartphones and apps.”
“This is the only example of a successful and viable open source mobile operating system,” Bethell said, calling for “a way forward that avoids limiting choice and opportunity for both UK consumers and businesses and without risking UK growth prospects”.
Earlier this week, the UK replaced CMA chairman Markus Bokkerink with Doug Gurr, former head of Amazon UK. At the time, the watchdog noted that in a recent meeting with the government, regulators were asked to “remove barriers to business and refocus their efforts on promoting growth.”
New powers
The CMA now has expanded regulatory powers after a new UK law called the Digital Markets, Competition and Consumer Act, or DMCC, came into force earlier this year.
The DMCC is committed to preventing anti-competitive behavior in digital markets. It can designate large companies that have significant market power in a particular digital activity as having “strategic market status”.
The CMA now has the power to introduce changes to prevent potential anti-competitive behavior from any firm granted strategic market status.
According to the regulator, almost all mobile devices sold in the UK come pre-installed with Apple’s iOS or Google’s Android operating system, and their app stores and browsers are exclusive or lead on their platforms compared to alternative products and services.
Almost all (94%) people aged 16 and over – around 56 million consumers – in the UK currently have access to a smartphone, with the average Briton spending around three hours a day using a mobile device, the CMA added.
The organization said it will examine three key issues, including the degree of competition between Apple and Google’s mobile ecosystems, the potential use of the tech giants’ market power in other activities and potential exploitation.
“More competitive mobile ecosystems can foster new innovation and new opportunities across a range of services that millions of people use, whether they’re app stores, browsers or operating systems,” Sarah Cardell said Thursday. executive director of the CMA.
“Better competition could also drive growth here in the UK, with businesses able to offer new and innovative types of products and services on Apple and Google platforms,” added Cardell.
