Battersea Power Station is home to Apple's UK headquarters
Apple and Google have been designated as companies with strategic market status by the British Competition and Markets Authority (CMA), which is likely to result in new restrictions and regulatory obligations for both companies. Here are the details.
Apple and Google may be forced to open up their mobile platforms
Last July, the UK’s CMA concluded a six-month investigation into Apple and Google, and said that it would consider designating both companies as having strategic market status (SMS) under the country’s new Digital Markets, Competition, and Consumers Act (DMCC).
The law, which closely follows the EU’s Digital Markets Act (DMA), aims to “take targeted and proportionate action to improve competition in digital markets, helping to drive innovation, investment and growth across the UK economy,” per the agency’s own words.
Now, the CMA has issued its conclusion that Apple and Google, in fact, have strategic market status in their platforms:
“The CMA has heard from more than 150 stakeholders and had constructive engagement with Apple and Google. Having analysed the feedback, the CMA has confirmed Apple and Google both have substantial, entrenched market power and a position of strategic significance in their respective mobile platforms and have been designated with SMS.”
The competition watchdog notes that the designation is not an accusation of wrongdoing, but rather a conclusion that will enable it to “consider proportionate, targeted interventions to ensure that mobile platforms are open to effective competition, and that consumers and businesses that rely on Google and Apple can have confidence that they are treated fairly.”
In its investigation, the CMA also concluded that British users are unlikely to switch between Android and iOS, that developers and businesses must rely on both platforms to reach consumers, and that the rise of AI is unlikely to diminish Apple or Google’s market power over the next five years. These three arguments contributed to its SMS findings.
Commenting on the CMA’s decision, the watchdog’s Executive Director for Digital Markets, Will Hayter, said the following:
“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.”
He also noted that 1.5% of the UK’s GDP is generated through the so-called app economy, “which is why it’s crucial these markets work well for business so they can invest, innovate and drive the growth this country needs.”
It is not clear yet which, if any, actions will be taken following the designation. In Apple’s case, the company may be required to allow sideloading and alternative app stores.
Apple, for its part, has criticized the CMA’s approach in the past with the following statement, as reported by Reuters:
“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.”
What do you think will happen following Apple’s SMS designation? Let us know in the comments.
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