UK Government Probes Google and Apple Over Mobile Dominance

The UK’s Competition and Markets Authority (CMA) this week announced plans to follow up on a June consultation looking into the dominance of Google and Apple in the mobile gaming and browser space. The new market investigation will look deeper into the ‘stranglehold’ the two companies hold over operating systems, app stores, and web browsers on mobile devices.

Both companies are likely to strengthen their grip over the sector

The initial June consultation was the culmination of a year-long study, which found that Apple and Google have ‘an effective duopoly’ on the mobile ecosystem. The report also stated that ‘without interventions, both companies are likely to maintain, and even strengthen, their grip over the sector.’

Market investigations are used by UK competition regulators to determine if there are anti-competitive elements in a market.

If it’s found that there are adverse effects on competition, then the CMA can use its powers to mandate changes in the behavior of firms and trigger legislation if that’s felt to be necessary. As part of its mandate, the CMA can even impose structural remedies, including making companies sell parts of their business to improve competition.

Apple and Google Under the Microscope

For the companies affected, the stakes are huge. Both Google and Apple command billion-dollar revenues from their dominance of the mobile space.

Over 97% of all mobile web browsing in the UK in 2021, was done on Apple or Google-powered browsers. There are also over 800,000 users of cloud gaming services in the UK, again dominated by the two giants.

The CMA takes the view that the limited choice of suppliers ultimately harms the consumer, and also severely restricts competition and innovation from other companies. This, in turn, can lead to added costs across the market, which again is detrimental to the consumer experience.

Apple and Google Mobile gaming

Image by SAIYED IRFAN A from Pixabay

When the agency released its initial report, there was a substantial response in support of a deeper investigation and action on the duopoly. These demands came from all parts of the market, including browser vendors, web developers, and cloud gaming providers.

Both Apple and Google claim that the restrictions in the market are to ‘protect users’, although we’re not told exactly how that works. As Sarah Cardell, interim chief executive of the CMA, explains:

We want to make sure that UK consumers get the best new mobile data services, and that UK developers can invest in innovative new apps.

In the meantime, the UK government is pushing ahead with the deployment of the Digital Markets Unit (DMU) within the CMA. This body is responsible for undertaking all the preparatory work needed to help the government draft suitable competition laws for the digital sector.

The DMU will gather evidence from all the stakeholders across the industry, including academia, other regulatory bodies, and the government. It’ll also prepare draft guidelines and build teams with the necessary expertise to advise the government.

It’s anticipated that the end result will be a comprehensive piece of legislation, which acts in collaboration with other international legislation to curb any possible inequalities in the market. This — it is hoped — will promote more competition and fairer pricing, plus provide an opportunity for homegrown companies and talent to flourish on a more level playing field.

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