Apple and Google have ‘vice-like’ grip on how we use smartphones. Users are losing out, says competition watchdog

The UK’s competition regulator set out some of the actions it could take to challenge the ‘vice-like grip’ that Apple and Google have over mobile devices and app distribution via iOS and Android. 

“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 UK to lose out,” said Andrea Coscelli, chief executive of the UK’s Competition and Market Authority (CMA). 

The CMA had provisionally found that Apple and Google were able to use their market dominance to create “largely self-contained ecosystems” through iOS and the App Store and Android and Google Play.

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The regulator believes any government intervention needs to tackle the companies’ power over iOS and Android, their respective app stores, and browsers, namely Apple Safari and Google Chrome. 

Actions the CMA is considering centre on interoperability, support of web apps distributed outside of app stores, freedom for developers to use third-party systems for in-app purchases, and browser choice. 

It’s possible actions might include “removing and amending existing restrictions from using third-party app stores or third-party payment systems,” the CMA says in its interim report. Apple doesn’t allow this currently while Google discourages it for security reasons.  

CMA said it was asked to investigate requiring Google to sell Android and the Play Store. “We have also considered whether a similar intervention in relation to Apple may bring benefits, for example, if it were required to sell its App Store or run it independently,” it said.

However, CMA considered a more effective form of separation would be “separation of Apple’s and Google’s own app development from their wider mobile ecosystems”. This would be “a more intrusive alternative” to other interventions, it notes, but would address cases where the companies have an incentive to favor their own apps.

“Most people know that Apple and Google are the main players when it comes to choosing a phone,” said Coscelli. “But it can be easy to forget that they set all the rules too – from determining which apps are available on their app stores, to making it difficult for us to switch to alternative browsers on our phones. This control can limit innovation and choice, and lead to higher prices – none of which is good news for users.”

The regulator expects responses from Apple and Google by 7 February 2022 following its release of an interim market study of mobile ecosystems.

Apple said in a statement: “Apple believes in thriving and dynamic markets where innovation can flourish. We face intense competition in every segment in which we operate, and our North Star is always the trust of our users. We will continue to create new opportunities for developers while protecting our user’s privacy and security.” 

“Our rules and guidelines are constantly evolving, and we have made many recent changes that benefit developers and consumers alike. We will continue to engage constructively with the UK Competition and Markets Authority as their work on this study progresses.” 

Google said: “Android provides people with more choice than any other mobile platform in deciding which apps and app stores they use. The Android app ecosystem also supports nearly a quarter of a million jobs across thousands of app developer and phone maker businesses in the UK. At Google we regularly review how we can best support these businesses – for example – as a result of recent changes, 99% of developers qualify for a service fee of 15% or less. We’re committed to building thriving, open platforms that empower consumers and help developers succeed.”