Apple and Google have ‘effective duopoly’ in UK says regulator

Apple and Google may be required to change the way they operate some of their mobile services in the UK, according to proposed decisions by the UK’s competition regulator.

The Competition and Markets Authority (CMA) is investigating the tech giants over their app stores, browsers and operating systems.

“Around 90-100% of UK mobile devices running on Apple or Google’s mobile platforms,” the CMA said, adding this means the firms “hold an effective duopoly”.

Apple said it is concerned the ruling would negatively impact its customers in the UK, while Google called the decision “both disappointing and unwarranted”.

A law which came in last year means the regulator can demand changes at a firm if it is found to hold too much market power.

The proposed decision would designate Apple and Google as having “strategic market status”.

The companies have a month to make their cases to the CMA before the decision is finalised.

If it is finalised, the companies may have to make changes to their services in a way that the regulator says promotes competition and gives more choice to consumers.

The CMA is focusing on the companies’ app stores, including how prominent Apple and Google’s own apps are compared with rival apps.

CMA Chief Executive Sarah Cardell said the proposals “would enable UK app developers to remain at the forefront of global innovation while ensuring UK consumers receive a world-class experience”.

“We’re concerned the rules the UK is now considering would undermine the privacy and security protections that our users have come to expect, hamper our ability to innovate, and force us to give away our technology for free to foreign competitors,” an Apple spokesperson said.

“We will continue to engage with the regulator to make sure they fully understand these risks.”

Google’s Senior Director of Competition Oliver Bethell said it was “crucial that any new regulation is evidence-based, proportionate and does not become a roadblock to growth in the UK.”

He added the Android operating system, Chrome browser and Play app store “enable great choice, security and innovation for users”.

“We remain committed to constructive engagement with the CMA for the duration of this process,” he added.

Android and Blink, the engine which powers the Chrome browser, are open source, which means developers can use their underlying code for free.

Google’s view is this enables greater competition and allows for cheaper products to be made.

Consumer rights group Which? welcomed the probe from the regulator.

“While these companies have driven innovation, their dominance is now causing real harm to consumers and to the businesses that depend on them,” said Rocio Concha, director of policy and advocacy.

Apple and Google, along with other tech giants, are subject to a number of competition and regulation investigations in the UK, EU and US, under new laws introduced recently in each region.

Apple has been subject to competition restrictions in the EU, and last month hit back against a €500m fine by the European Commission.

The EU’s enforcement arm accused it of breaching the law by restricting the ability of app developers to promote alternative marketplaces to App Store users.

The company is fighting similar allegations concerning payment options in its App Store in the US.

Last month, the CMA announced in a separate investigation Google holds strategic market status in search and advertising.

CMA boss Sarah Cardell said while there were “tremendous benefits” to Google search – which accounts for more than 90% of UK searches – its probe suggested there may be ways to make the sector more open and competitive.

The watchdog said it was not accusing Google of anti-competitive practices but would set out a “roadmap” of changes it could make to its business ahead of a final decision in October.