Apple may have to allow rivals to operate their own app stores on iPhones in the UK, following a ruling from the competition regulator. This would be a significant change to Apple’s infamous “closed system” where apps can only be downloaded from its own App Store. But the Competition and Markets Authority (CMA) has designated both Apple and Google as having “strategic market status”—effectively saying they have too much power over mobile platforms. The ruling has drawn fury from the tech giants, with Apple saying it risked harming consumers through “weaker privacy” and “delayed access to new features,” while Google called the decision “disappointing, disproportionate, and unwarranted.”
The CMA told the two companies “they could limit innovation and competition.” But the regulator said it would not “find or take responsibility for the companies’ mistakes.” “The app economy generates 1.5% of the UK’s GDP and supports around 400,000 jobs, which is why it’s crucial these markets work well for businesses,” said Will Hayter, the CMA’s executive director for digital markets. “Around 90-100% of UK mobile devices run on Apple or Google’s mobile platforms,” the CMA has previously said, adding this meant the firms “hold an effective duopoly.” According to analysis by Uswitch, 48.5% of UK mobile owners use an iPhone—which runs Apple’s iOS operating system (OS)—with the vast majority of the rest using Google’s Android OS. This comes after a separate decision taken in October, where the CMA designated Google’s search division as having strategic market status.
The CMA told the two companies “they could limit innovation and competition.” But the regulator said it would not “find or take responsibility for the companies’ failures.” “The app economy generates 1.5% of the UK’s GDP and supports around 400,000 jobs, which is why it’s crucial these markets work well for businesses,” said Will Hayter, the CMA’s executive director for digital markets. “Around 90-100% of UK mobile devices run on Apple or Google’s mobile platforms,” the CMA has previously said, adding this meant the firms “hold an effective duopoly.” According to analysis by Uswitch, 48.5% of UK mobile owners use an iPhone—which runs Apple’s iOS operating system (OS)—with the majority of the rest using Google’s Android OS. This comes after a separate decision taken in October, where the CMA designated Google’s search division as having strategic market status.
Apple warned the UK could lose access to new features—as has happened in the EU—which the company blames on heavy regulation. For example, some Apple Intelligence features that were launched in other parts of the world are not available in the EU. “Apple faces fierce competition in every market where we operate, and we work seamlessly to create the best products, services, and user experience,” the company said in a statement. “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.”
Google also livid Android users can currently use third-party app stores – though critics say they are not as smooth as Google’s own Play Store. The CMA’s roadmap said Google may have to “change the user experience” of downloading apps directly from websites, as well as “remove user frictions” when using alternative app stores, such as listing them directly on the Google Play Store. “We simply don’t see the rationale for today’s designation decision,” Google competition leader Oliver Bethell said. Mr. Bethell said “most Android users” use alternative app stores or download apps directly from a developer’s website, and claimed there is a wider range of apps available to Android users compared to those on Apple devices. “There are now 24,000 Android phone models from 1,300 phone manufacturers worldwide, facing intense competition from iOS in the UK,” he said. Android is an open-source operating system, which means developers can use and build on top of it for free.
Google argues this means it opens up competition. But consumer group Which? said curtsy on these companies’ power in other countries “are already helping businesses innovate and giving consumers more choice.” “Their dominance is now causing the real sting of restricted choice for consumers and competition for businesses,” said its head of policy and advocacy, Rocio Concha.