Competition and Markets Authority turns attention to Google and Apple

The Competition and Markets Authority (CMA) is looking at the business practices of Google and Apple to assess whether their dominant mobile operating systems and app stores are anti-competitive.

Apple iOS and Google Android are effectively the de facto standards for mobile device operating systems. They are not interchangeable – the iOS operating system is only available on Apple devices, while Android runs on pretty much every other smartphone and mobile device.

Android developers can only use the Google Play store to distribute their apps, while iOS developers are restricted to the App Store from Apple. This effectively means that when a consumer buys a device, their choices of apps is restricted by whether the developer chooses to develop and distribute apps for both iOS and Android.

The CMA plans to assess whether the supply of the iOS and Android smartphone operating systems, Chrome and Safari web browsers, and the Google Play and Apple App Store platforms limit consumer choice.

Following the formation of the Digital Markets Unit (DMU) of the CMA, which has a remit to look at competition among the digital giants, the competition watchdog announced it would be conducting a study to look into whether the two firms’ control over mobile ecosystems stifles competition. 

The CMA said it also planned to examine any effects of the firms’ market power over other businesses – such as app developers – which rely on Apple or Google to market their products to customers via iOS and Android-based smartphones.

“Apple and Google control the major gateways through which people download apps or browse the web on their mobiles. We’re looking into whether this could be creating problems for consumers and the businesses that want to reach people through their phones”

“Apple and Google control the major gateways through which people download apps or browse the web on their mobiles – whether they want to shop, play games, stream music or watch TV. We’re looking into whether this could be creating problems for consumers and the businesses that want to reach people through their phones,” said the CMA’s chief executive, Andrea Coscelli.

“Our ongoing work into big tech has already uncovered some worrying trends and we know consumers and businesses could be harmed if they go unchecked. That’s why we’re pressing on with launching this study now, while we are setting up the new Digital Markets Unit, so we can hit the ground running by using the results of this work to shape future plans,” he added.

In October 2020, 11 US states filed an anti-competitive complaint with the Department of Justice (DoJ) against Google. While the bulk of the complaint is focused on its search engine monopoly, a requirement by Google to distribute Android devices with its proprietary Play Services software is also highlighted in the filing.

At the time, Kent Walker, senior vice-president of global affairs at Google, described the DoJ case as “deeply flawed”. He wrote in a blog post: “On Android devices, we have promotional agreements with carriers and device makers to feature Google services. These agreements enable us to distribute Android for free, so they directly reduce the price people pay for phones. But even with these agreements, carriers and device makers often preload numerous competing apps and app stores.”