Apple and Google may face action over mobile phone dominance, says UK watchdog

Apple and Google may be forced to make changes to their mobile platforms as current rules could be “limiting innovation and competition”, a UK watchdog has found.

The Competition and Markets Authority (CMA) said the two tech giants had substantial and entrenched market power with their platforms.

It confirmed they were given so-called “strategic market status”, which is designated to the largest and most powerful businesses.

The decision means the regulator can choose to intervene to open them up to more competition that it says will benefit consumers and businesses.

Around 90% to 100% of UK mobile devices run on Apple or Google’s mobile platforms, according to the CMA.

People are unlikely to switch between the two devices, remaining either an Apple or Android user, it found. 

The CMA gained new powers at the beginning of the year to clamp down on players it believes are dominating digital markets.

It launched investigations into Apple and Google’s mobile platforms, which incorporates their operating systems, including iOS and Android, app stores and browsers that appear on mobile phones.

Will Hayter, executive director for digital markets at the CMA, said: “Apple and Google’s mobile platforms are used by thousands of businesses right across the economy to market and sell products and services to millions of customers, but the platforms’ rules may be limiting innovation and competition.

“Having taken into account the feedback received since our proposed decision, we have today designated Apple and Google’s mobile platforms with strategic market status.”

Having strategic market status means a company has substantial and entrenched market power, and significant size, scale or influence in terms of their digital activity.

They must also have turnover of more than £1 billion in the UK or £25 billion globally.

A separate investigation into Google found that it had dominance over the market with its search engine services, including Chrome.

That decision, published earlier this month, marked the first time the CMA had used its new powers to designate a tech firm with the strategic market status.

Oliver Bethell, Google’s senior competition director, criticised the watchdog’s decision as “disappointing, disproportionate and unwarranted”.

“The UK’s new digital markets regime was introduced with the promise of being pro-growth and pro-innovation, with the CMA emphasising that its work would be highly targeted and proportionate,” he said.

“In this context, we simply do not see the rationale for today’s designation decision.”

There are 24,000 Android phone models from 1,300 phone manufacturers worldwide, “facing intense competition” from the iOS system in the UK, Mr Bethell said.

A spokeswoman for Apple said: “Apple faces fierce competition in every market where we operate and we work tirelessly to create the best products, services and user experience.

“The UK’s adoption of EU-style rules would undermine that, leaving users with weaker privacy and security, delayed access to new features, and a fragmented, less seamless experience.

“We’ve seen the impact of regulation on Apple users in the EU and we urge the UK not to follow the same path.”