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Apple And Google May Face Competition Investigation In UK

UK

Apple and Google may be the subject of a competition probe due to their dominance of mobile web browsers and apps in the United Kingdom.

TakeAway Points:

  • The independent inquiry group of the U.K.’s Competition and Markets Authority released a report on Friday suggesting that the watchdog look into Apple and Google’s operations in mobile ecosystems.
  • Under the new Digital Markets, Competition, and Consumers Act (DMCC), a new statute in the United Kingdom, the inquiry group suggested that the CMA look into the U.S. tech giants.
  • In order to combat anti-competitive behaviour in digital marketplaces, the DMCC aims to prevent it and grants the CMA the authority to enforce significant behavioural changes.

Apple and Google might undergo probing in UK

The U.K.’s Competition and Markets Authority issued a report Friday with a provisional decision from an independent inquiry group tasked by the regulator with carrying out an in-depth review of the mobile browser markets.

In the report, the group recommended that the CMA investigate Apple and Google’s activities in mobile ecosystems under the new Digital Markets, Competition, and Consumers Act (DMCC), a new U.K. law coming into force next year that seeks to prevent anti-competitive behavior in digital markets.

The DMCC is akin to the Digital Markets Act in the European Union. It gives the CMA the ability to designate firms as having “Strategic Market Status” (SMS), which means they have a significant amount of market power in a certain digital business.

Under the rules, the CMA can impose major behavioral changes on firms that have SMS status, including ending “self-preferencing” of their own services, requiring nteroperability—essentially  allowing one piece of software to work with another smoothly—and banning anti-competitive behavior.

The CMA is required to undertake a formal investigation to give a firm SMS status.

Raised concerns

For Apple specifically, the CMA inquiry group said it was concerned the tech giant’s App Store rules “restrict other competitors from being able to deliver new, innovative features that could benefit consumers”—for example, faster webpage loading on iPhone apps.

It added that many smaller U.K. developers said they would like to use “progressive” web aapps—which allow firms to offer apps outside of an app store—but that this technology “is not able to fully take off on iOS devices.”

The group also said it found a revenue-sharing agreement between Google and Apple to make Google the default search engine on iPhones, which “significantly reduces their financial incentives to compete in mobile browsers on iOS.”

“Markets work best when rival businesses are able to develop and bring innovative options to consumers,” Margot Daly, chair of the CMA’s independent inquiry group, said in a statement, adding that “competition between different mobile browsers is not working well and this is holding back innovation in the U.K.”

Reactions and responses

Apple said in a statement that it disagreed with the findings of the report and that it was concerned market interventions imposed under the DMCC “would undermine user privacy and hinder our ability to make the kind of technology that sets Apple apart.”

 “Apple believes in thriving and dynamic markets where innovation can flourish. We face competition in every segment and jurisdiction where we operate, and our focus is always the trust of our users,” an Apple spokesperson wrote via email.

The CMA group had also looked into restrictions on the distribution of gaming services on Apple’s mobile app distribution platform. However, it’s now decided to drop this element of the investigation following a decision by the U.S. tech giant to allow cloud gaming services on App Store.

The regulator said interested parties have until Dec. 13 to share comments on its provisional findings. It expects to make a final decision in March 2025.

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