UK antitrust regulator to investigate Apple and Google over mobile app practices

UK antitrust regulator to investigate Apple and Google over mobile app practices

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The U.K.’s antitrust regulator, the Competition and Markets Authority, today announced plans to investigate Apple Inc. and Google LLC over their business practices in the mobile app ecosystem.

The CMA is launching multiple investigations focused  on three different areas. Officials plan to scrutinize the market power that Apple and Google possess in the mobile browser market. Additionally, the CMA will investigate Apple’s business practices in the cloud gaming segment, as well as the restrictions that Google imposes on in-app payments.

Apple and Google are the leading players in the mobile browser segment, the first area that the CMA plans to prioritize as part of its new antitrust initiatives. Apple competes in the segment with its Safari browser while Google offers Chrome. Safari and Chrome are based on the Chromium and WebKit browser engines, respectively.

According to a study conducted by the CMA, 97% of all mobile browsing in the U.K. last year was powered by browsers based on Chromium or WebKit. “Choice in this space is severely limited and that has real impacts – preventing innovation and reducing competition from web apps,” CMA Chief Executive Andrea Coscelli said in a statement.

Another area of concern for the CMA is Apple’s requirement that competing iOS browser apps use the same WebKit browser engine as Safari. Officials are concerned that this policy limits competitors’ ability to differentiate their software from Safari. Additionally, the CMA stated that the policy may reduce Apple’s incentive to invest in WebKit.

The fact that Chrome and Safari are preinstalled on many mobile devices was listed as another potential issue by the regulator. According to the CMA, this business practice gives Apple and Google a “key advantage” over rival browsers. “We need to give innovative tech firms, many of which are ambitious start-ups, a fair chance to compete,” Coscelli stated.

The CMA is launching a separate investigation into Apple’s decision to prevent cloud gaming services from listing in the App Store. Cloud gaming services enable users to run a video game in the public cloud and access it without having to download additional software. 

“Gaming apps are a key source of revenue for Apple and cloud gaming could pose a real threat to Apple’s strong position in app distribution,” the CMA stated. “By preventing this sector from growing, Apple risks causing mobile users to miss out on the full benefits of cloud gaming.”

Google, meanwhile, will face a competition law investigation over Google Play’s in-app purchases rules. Until recently, the search giant required that developers process in-app purchases using its own payment system. This requirement still applies in most cases, but Google recently launched a pilot program that enables participating developers to use other payment systems.

The CMA earlier launched a similar investigation into Apple’s in-app transaction rules. The iPhone maker requires developers to use its own payment system, IAP, to process purchases that users make through an app’s interface.  Apple’s business practices in the mobile payments market have also drawn scrutiny from the European Commission.

“We regularly review how we can best support developers and have reacted quickly to CMA feedback in the past,” Google said in a statement today. “We will review the report and continue to engage with the CMA.”

Apple, in turn, stated that “we respectfully disagree with a number of conclusions reached in the report, which discount our investments in innovation, privacy and user performance — all of which contribute to why users love iPhone and iPad and create a level playing field for small developers to compete on a trusted platform.” The company added that it will “continue to engage constructively with the CMA to explain how our approach promotes competition and choice.”

Photo: Unsplash

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