The UK government opened an investigation into Apple and Google’s mobile ecosystems over “concerns that they have market power that harms users and other businesses” Press release specified by the country’s Competition and Market Authority (CMA). “These companies now have an effective duopoly over mobile operating systems: In 2020, Apple iOS accounted for 52% of mobile operating systems in Great Britain and Google Android for 48%,” said the statement on the scope of the study.
“Apple and Google control the most important gateways through which people download apps or surf the Internet with their mobile phones – regardless of whether they want to shop, play games, stream music or watch TV. We are investigating whether this could cause problems for consumers and businesses who want to reach people on their phones. ”- Andrea Cocelli, General Manager of the CMA, said
The study will be carried out over the next 12 months and the final report of this study will be published no later than June 14, 2022, said CMA. The authority welcomes comments from interested parties on the scope until July 26, 2021.
The competition authority is already investigating Apple’s App Store and Suggestions for Google’s privacy sandbox, these existing studies will fall within the scope of the new mobile ecosystem study, but the new one is “much broader,” the press release said. “Our ongoing work in big tech has already identified some worrying trends and we know that if left unchecked, consumers and businesses could be harmed,” said Coscelli.
What is the UK investigation examining?
The CMA launched this market study to find out whether the effective duopoly of Google and Apple over the delivery of Operating systems (iOS and Android), app stores (App Store and Play Store) and web browsers (Safari and Chrome) stifles competition and leads to consumer losers. “The CMA fears that this could lead to a reduction in innovation across the sector and consumers paying higher prices for devices and apps or other goods and services due to higher advertising prices,” the agency said. The research will examine these four broad themes:
Competition in the delivery of mobile devices and operating systems: The study examines whether there are natural barriers to entry such as network effects and economies of scale when deploying mobile operating systems. It also examines whether Google and Apple include customers in their respective ecosystems and what barriers they create to do so.
Competition in the diffusion of mobile apps: The study examines what power Google and Apple have in the spread of mobile apps and to what extent there are suitable alternatives to the standard app stores. It also investigates whether the two companies are using their power to exploit consumers and app developers. The study will also examine whether the app review process is successful in preventing malicious apps from spreading.
Competition in the delivery of mobile browsers and browser engines: The study will examine the extent to which the two companies have market power in the delivery of mobile browsers, including an examination of potential barriers to entry for competitors. The study will also seek to assess whether Google and Apple’s positions in serving browsers allow them to gain an advantage in other parts of their mobile ecosystem.
The role of Apple and Google in the competition between app developers: The study examines how the behavior of the two companies as app store providers affects the competition between app developers. It examines whether Google and Apple are using their position to bring competing apps and services to market and whether these are preferred over third-party apps when presented to consumers. CMA issued a questionnaire for app developers who ask about their experience developing apps for iOS and Android and their experience with the App Store and Play Store. The questionnaire covers topics such as the app review process, search rankings in app stores and competition from Google’s and Apple’s own apps.
What are the possible outcomes?
The CMA is working on Creation of a new competitive regulatory system for digital markets, this investigation is expected to help on that front. In the statement on the scope of the investigation, four broad categories of intervention were identified in the event the CMA determines that the current market is not functioning well:
- Interventions that limit the ability of platforms to exercise market power: This includes measures that prevent or punish exploitative or marginal behavior.
- Interventions to promote interoperability and common standards: This includes implementing measures that help prevent consumer loyalty by allowing greater freedom when switching between providers.
- Choices for consumers: This includes implementing measures that enable consumers to make informed choices between content and service providers by giving them access to information and by giving them choices through the design architecture used when choosing a service. This also includes the setting of default settings, insofar as this is necessary in the interests of the consumer.
- Release agent: This includes the operational separation between platforms of the same company in order to spread market power and the functional separation of data sets in order to create a level playing field.