Recently, the U.K. competition watchdog announced the closure of its investigations into Apple and Google’s mobile app ecosystems. The investigations were focused on the terms and conditions governing developers’ access to the App Store and Play Store, respectively. The Competition and Markets Authority (CMA) had expressed concerns that these terms and conditions might unfairly limit developers’ choices. Despite finding substantial grounds for concern regarding the duopoly in the mobile ecosystem, the CMA decided to close both probes without taking any action. This regulatory reprieve may seem like a relief for Apple and Google, but it is expected to be short-lived.
The Incoming Digital Markets Regime
The CMA cited administrative priorities as the reason for closing the probes. However, the watchdog indicated that it would leverage new competition powers to apply special abuse controls on tech giants with strategic market power. The new digital markets regime is expected to resolve concerns related to app stores, with a specific focus on addressing issues in mobile ecosystems. This signals that Apple and Google are likely to be the first targets for these special abuse controls under the new regime.
Will Hayter, the executive director for digital markets at the CMA, emphasized the importance of ensuring fair and competitive app ecosystems for tech businesses in the U.K. This includes providing access to a level playing field for app developers to promote sector growth, boost investment, and deliver better outcomes to consumers. The CMA’s intention to launch investigations under the new regime underscores its commitment to addressing competition issues in the digital market.
The U.K.’s digital markets regime has undergone several delays but was ultimately revived and passed into law as the Digital Markets, Competition and Consumer Act. This legislation grants the CMA the authority to crack down on Big Tech companies with strategic market status. The CMA’s decision to close the investigations into Apple and Google aligns with its strategy to use new powers under the DMCCA to address concerns in the mobile sector comprehensively.
Despite the regulatory developments, U.K. developers may have to wait longer for significant action to address the dominance of Apple and Google in the app ecosystem. The CMA must undertake investigations to determine strategic market status for tech giants before designating them under the regime. This process could result in delays before any meaningful intervention to curb the power of Big Tech companies takes effect.
One notable aspect of the CMA’s decision was the rejection of commitments submitted by Google to address concerns about its Play Store terms. The proposed commitments, known as “Developer-Only Billing” and “User Choice Billing,” aimed to give app developers alternative payment options. However, the CMA deemed Google’s proposals insufficient in addressing competition concerns effectively. This rejection highlights the challenges of regulating platform operators under the new regime.
The U.K.’s approach to regulating tech giants differs from the more prescriptive competition reboot in the European Union known as the Digital Markets Act (DMA). While the DMCCA allows for bespoke interventions tailored to specific platforms and issues, the DMA provides a fixed list of rules for designated gatekeepers. As a result, the U.K. lags behind the EU in addressing platform power, with implications for how Apple and Google are regulated in different jurisdictions.