UK watchdog launches probe into Apple and Google mobile dominance, big techs staring at trouble?

After its study discovered that Apple and Google make up a duopoly in the mobile market, the UK’s Competition and Markets Authority has decided to investigate cloud gaming and mobile browsers.

The CMA conducted a 12-month-long study of the mobile software, hardware, and service industry. The UK competition watchdog said that it would open a formal investigation because Apple and Google have “a stranglehold over operating systems, app stores and web browsers on mobile devices.”

The investigation has started and should be wrapped up in a maximum of 18 months. Then, the CMA may elect to take action, such as demanding changes in how some items are sold, making business units sell off their assets, or requiring the removal of anti-competitive limitations.

In a statement, Sarah Cardell, interim Chief Executive of the CMA-

“Many UK businesses and web developers tell us they feel that they are being held back by restrictions set by Apple and Google.”

He also added-

“When the new Digital Markets regime is in place, it’s likely to address these sorts of issues. In the meantime, we are using our existing powers to tackle problems where we can. We plan to investigate whether the concerns we have heard are justified and if so, identify steps to improve competition and innovation in these sectors.”

Furthermore, the CMA is independently investigating Google’s ad business model and its proposed Chrome “Privacy Sandbox” initiative. Another notable UK agency, Ofcom, is also conducting a study on how Amazon, Microsoft, and Google each affect competition levels within the cloud service industry as a whole.

The CMA is targeting Apple and Google’s monopoly on operating systems, app stores, and web browsers for mobile devices. As it says-

“97 percent of all mobile web browsing in the UK in 2021 happens on browsers powered by either Apple’s or Google’s browser engine.”

This makes browser engine restrictions significant when considering the competition.

The agency notes that 800,000 users of cloud gaming services in the UK are restricted by Apple and Google’s policies on mobile cloud gaming services.

The CMA is investigating one of Apple’s key policies- the ruling that all mobile browsers on iOS devices must use Apple’s WebKit rendering engine as opposed to other browser engines like Google’s Blink or Mozilla’s Gecko. The CMA further stated-

“Web developers have complained that Apple’s restrictions, combined with suggested underinvestment in its browser technology, lead to added costs and frustration as they have to deal with bugs and glitches when building web pages, and have no choice but to create bespoke mobile apps when a website might be sufficient,”

The CMA’s market investigation [PDF] will also focus on the use of in-app browsers. These are pseudo-browsers implemented within native apps that don’t have the same limitations as stand-alone browsers.

In response to this, Apple stated that it would continue working productively with the CMA to illustrate how its policies are based on a culture that encourages competition and consumer choice. So far, Google has not released any statements.

The company, through its law firm Gibson Dunn, said-

“Apple considers that a balanced review of the evidence would lead to the conclusion that competition with respect to both mobile browsers and cloud gaming is robust and that, in particular, Apple’s approach provides users with a valuable choice, centered on security, privacy and performance, between ecosystems,”

What will happen after the investigation concludes?

CMA (The Competition and Markets Authority) needs 18 months to complete an in-depth market investigation. If the study finds anti-competitive behavior, CMA can order remedies from firms and suggest regulation changes to the government, as reported by Politico.

UK Chancellor Jeremy Hunt announced last Thursday that the government would present new regulations to fight Big Tech’s anti-competitive behavior.

He said that the new protocols will address “sorts of issues” raised in Apple and Google’s dominance over mobile ecosystems and that it will be done before May next year with the help of the Digital Markets Competition and Consumers Bill.

According to media reports, the UK’s Competition and Markets Authority could receive new regulatory powers as early as October next year.

It is anticipated that this investigation will bring some significant results which could lead to a major shake-up in the digital markets. Only time will tell how this plays out and what the results of the CMA’s investigation will be.

It is clear that a major transformation is underway in the digital industry, with these changes spurring much-needed competition and fairness to everyone involved. It remains to be seen how this investigation fares and the extent of its implications.

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