UK says Apple, Google have ‘vice-like grip’ on smartphones and millions are losing out

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Yet another regulator isn't pleased.
Photo: Aaron Yoo

The U.K.’s Competition and Markets Authority (CMA) says Apple and Google have unfairly “developed a vice-like grip” on how we use our smartphones and that “millions of people” are losing out.

In addition to dominating the smartphone market, Apple and Google also “set all the rules,” the CMA said in a report published Tuesday. The two companies are accused of limiting innovation and choice, and driving up smartphone prices.

Apple and Google have created ‘largely self-contained ecosystems’

The CMA is just one of many regulators around the world that have been investigating Apple and Google over their smartphone practices. It kicked off its probe earlier this year over concerns that the two technology giants have too much control over operating systems, app marketplaces, and web browsers.

In its preliminary findings, the CMA has determined that Apple and Google do indeed “leverage their market power to create largely self-contained ecosystems,” making it difficult for others to compete and stifling the smartphone experience for millions of users.

The CMA said:

When someone buys a mobile device, they essentially enter either Apple’s iOS or Google’s Android ecosystem. As a result, Apple and Google are able to control how online content, such as mobile apps and websites, is provided to users. They can also tilt the playing field towards their own services.

‘Less competition and meaningful choice’

Apple, for instance, does not allow third-party app marketplaces to be installed on iPhone and iPad, the CMA noted. Both companies also pre-install their own web browsers on all devices (Apple also prevents third-party browser developers from using many of the technologies integrated into Safari).

The CMA said it is concerned that this is “leading to less competition and meaningful choice for customers.” It also believes that people are missing out on the “full benefit of innovative new products and services,” such as web apps and new ways to play games through the cloud on iOS.

In addition, the CMA is concerned that this “duopoly” could be leading to higher prices — not only for smartphones, but for mobile app subscriptions and in-app purchases, too.

The CMA calls for intervention

“Apple and Google have developed a vice-like grip over how we use mobile phones and we’re concerned that it’s causing millions of people across the U.K. to lose out,” said Andrea Coscelli, Chief Executive of the CMA, who believes intervention is needed to “tackle the firms’ substantial market power.”

Some of the changes the CMA has proposed to address the issue include:

  • Making it easier for users to switch between Android and iOS without losing functionality or data.
  • Making it easier to install apps through methods other than the App Store or Google Play Store.
  • Enabling all developers to give users a choice of payment methods for in-app purchases and subscriptions.
  • Making it easier for users to choose alternatives to Apple’s and Google’s own services, including web browsers.

What next?

Although Apple and Google aren’t being forced to make changes now, the CMA warned that, as things stand, both companies meet the criteria for “Strategic Market Status” (SMS) in the U.K. New laws have been proposed to deal with SMS, though they are still in the early status and subject to consultation.

If the proposals become law, it will ultimately be up to the Digital Markets Unit (DMA), which sits within the CMA, to decide if Apple and Google get SMS status. If they do, they would face “legally enforceable codes of conduct to govern their behavior and to prevent them from exploiting their powerful positions.”

The CMA has given Apple and Google until February 7, 2022, to respond to its initial findings. It is scheduled to publish its final report next June. In the meantime, it is conducting a deeper investigation into the App Store and Google Play Store over competition concerns.

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