Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Omar Marques | Lightrocket | Getty Images
LONDON – Britain’s competition regulator on Thursday launched an investigation into the huge mobile ecosystem of Apple and Google to determine whether the tech titans are in breach of the UK’s strict new digital competition rules.
The UK’s Competition and Markets Authority said it was opening dual probes into the two US tech giants to assess whether they maintain “strategic market status” in their respective mobile ecosystems, including operating systems, app stores and smartphone-based browsers.
The investigations will “explore the impact on people who use mobile devices and the thousands of businesses that develop innovative services or content such as apps for these devices.” the CMA said.
“Apple believes in thriving and dynamic markets where innovation can flourish,” an Apple spokesperson told CNBC. “We face competition in every segment and jurisdiction where we operate, and our focus is always the trust of our users.”
“In the UK alone, the iOS app economy supports hundreds of thousands of jobs and enables developers large and small to reach users on a trusted platform,” the Apple spokesperson added. “We continue to engage constructively with the CMA as its work on this matter progresses.”
Oliver Bethell, Google’s senior director of competition, said the company’s Android platform “has helped expand choice, lower prices and democratize access to smartphones and apps.”
“It’s the only example of a successful and viable open source mobile operating system,” Bethell said, urging a “way forward that avoids stifling choice and opportunity for UK consumers and businesses , and no risk to the UK’s growth prospects.”
Earlier this week, the United Kingdom replaced CMA president Marcus Bokkerink with Doug Gurr, a former Amazon UK country manager. At the time, the watchdog noted that regulators were asked in a recent meeting with the government to “break down barriers that hinder business and refocus their efforts to promote growth.”
Labor MP Dan Aldridge said by email that the launch of the CMA’s investigation into Apple and Google was “a crucial step forward in ensuring fair competition in our digital economy”.
“Companies like Apple and Google decide who we access and how much we pay,” he said in an emailed comment Thursday. “These investigations will examine these practices, as they can stifle innovation and lead to higher prices for consumers.”
New powers
The CMA has now strengthened regulatory powers after a new UK law, called the Digital Markets, Competition and Consumer Act, or DMCC, came into force at the beginning of this year.
The DMCC seeks to prevent anti-competitive behavior in digital markets. It can designate large companies that have a significant amount of market power in a certain digital activity as having “strategic market status.”
The CMA now has the power to impose changes to prevent potential anti-competitive behavior by any company that is given a strategic market status.
According to the regulator, almost all mobile devices sold in the UK are pre-installed with Apple’s iOS or Google’s Android operating systems, and their app stores and browsers have exclusive or leading positions on their platforms compared to alternative products and services.
Almost all (94%) of people aged 16 and over – around 56 million consumers – in the UK currently have access to a smartphone and the average Briton spends around three hours a day with a mobile device, the CMA added .
The body said it will examine three key issues, including the extent of competition between the mobile ecosystem of Apple and Google, the possible exploitation of the market power of the technology giants in other activities and a potential exploitative behavior.
“More competitive mobile ecosystems could foster new innovations and new opportunities in a range of services that millions of people use, whether app stores, browsers or operating systems,” Sarah Cardell, CEO of CMA, said in a statement Thursday.
“Better competition could also stimulate growth here in the UK, with businesses able to offer new and innovative types of products and services on the Apple and Google platforms,” added Cardell.
