The UK’s competition regulator is targeting the duopoly in the mobile app market held by Apple and Google with new proposals aimed at spurring on competitive practices.
The Competition and Markets Authority (CMA) on Wednesday proposed that both Apple and Google be designated as having strategic market status (SMS) in the app store industry – a category defining them as having a disproportionate amount of control in the sector under the Digital Markets Act.
According to the CMA, while the UK app economy is both vibrant and essential to the economy – generating 1.5% of Britain’s GDP and supporting around 400,000 jobs – the level of control the two US tech giants have over how apps are hosted and downloaded risks restricting innovation for developers.
Research from the CMA found that around 90-100% of UK mobile devices run on Apple or Google’s platforms, giving the firms an unfair amount of control over how apps are offered to consumers.
The CMA said this level of market dominance has led to numerous concerns from developers, including inconsistent and unpredictable app review processes, app store search rankings that favour software owned by Apple or Google, restrictions on functionality and forcing app developers into accepting the hefty 30% commission on in-app purchases.
Each of these issues will be investigated further to determine how a fairer app store ecosystem can be established for UK developers.
“Apple and Google’s mobile platforms are both critical to the UK economy – playing an important role in all our lives, from banking and shopping to entertainment and education. But our investigation so far has identified opportunities for more innovation and choice,” said CMA chief executive Sarah Cardell.
“The targeted and proportionate actions we have set out today would enable UK app developers to remain at the forefront of global innovation while ensuring UK consumers receive a world-class experience. Time is of the essence: as competition agencies and courts globally take action in these markets, it’s essential the UK doesn’t fall behind.”
Responding to the decision, Kush Amlani, competition and regulation director at Mozilla, said: “At present a small handful of companies dominate our digital lives, limiting our experiences and stifling competition and innovation.
“Today’s provisional decisions from the CMA are a crucial step towards changing that: giving people genuine choice online and bringing renewed dynamism to the UK’s digital economy. This is the first milestone on the road to lowering operating system barriers to competition and unleashing UK innovation and growth.”
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