Google's Play Store rule requiring developers to utilize its payment method is also being investigated by the CMA.
After examining Google and Apple's "duopoly" for a year, the UK's Competition and Markets Authority (CMA) has decided that they "hold all the cards" in the mobile phone market. It's now advising on the beginning of a market probe into the internet giants' mobile browser market power, as well as Apple's cloud gaming limits. In addition, the CMA has opened a second inquiry into Google's Play Store guidelines, specifically the rule requiring certain app developers to use Google's payment system for in-app purchases.
After a year of research, the CMA has found that the digital behemoths do indeed have a "effective duopoly" on mobile ecosystems. Apple and Google's browser engines are responsible for 97 % of all mobile web browsing in the UK. iPhones and Android smartphones often come pre-installed with Safari and Chrome, giving their browsers an early lead. Furthermore, Apple mandates developers to use its WebKit engine to surf the web in their iOS and iPadOS apps. According to the CMA, this reduces Apple's incentives to invest in Safari.
Apple also has controls in place that prevent cloud gaming apps from being downloaded from its App Store, according to the agency. If they wish to be featured, cloud gaming services would have to submit each playable game individually for evaluation and approval. The business subsequently made an exception, but only to allow services like Xbox Cloud Gaming to be accessed via a browser on iOS devices.
The CMA stated in its announcement that the lack of intervention would allow the digital behemoths to preserve and even expand their control over mobile browsers, operating systems, and app marketplaces. Their duopoly might hinder competition and reduce incentives for individuals and other businesses to develop new items and technologies for those markets.
The CMA intends to take action by opening a formal market probe into Apple and Google's domination of the browser industry. If the CMA finds that both browsers have a "adverse effect on competition," it can impose remedies on Apple and Google or suggest that the UK government pass laws.
"The CMA has broad authorities to influence corporate behavior, such as regulating the manner a product is sold in a particular market and the information available to people buying that product," the agency stated. The CMA can also impose structural remedies, such as requiring companies to divest parts of their businesses in order to improve competition."
Furthermore, the probe will look into Apple's cloud gaming limits for the iOS App Store, which have prevented companies from enabling game streaming. This is due to current regulations prohibiting the distribution of many cloud-based games through a single app.
Apple and Google, on the other hand, told Reuters (Opens in a new window) that they disagree with CMA's claims that both corporations have been unfairly hurting third-party developers. "We respectfully disagree with a number of conclusions reached in the report," an Apple spokesperson said, "which discount our investments in innovation, privacy, and user performance—all of which contribute to why users love iPhone and iPad and create a level playing field for small developers to compete on a trusted platform." Nonetheless, both firms want to work with the UK regulator.
On the intended market inquiry, the CMA is now "consulting." The CMA must complete the investigation within 18 months of the start of the investigation, though the period might be extended for further six months.
