The CMA’s market study into mobile ecosystems was launched in June 2021 to assess potential sources of harm to consumers within four broad themes:

1. competition in the supply of mobile devices and operating systems;
2. competition in the distribution of mobile apps;
3. competition in the supply of mobile browsers and browser engines; and
4. the role of Apple and Google in competition between app developers.

In December 2021, the CMA published an interim report setting out its initial findings, the concerns that it had identified, and the range of potential interventions it had identified that could address them.

In February 2022, the CMA published a progress update, noting the two key developments since publication of the interim report, i.e., the CMA’s decision to accept the commitments offered by Google on its plans to remove third-party cookies from Chrome and replace them with alternative “Privacy Sandbox” tools, and Google’s announcement of a similar set of privacy-related changes to be made in relation to app advertising within the Android ecosystem, referred to as its Android Privacy Sandbox.

The CMA has now published its final report, in which it concludes that Apple and Google’s duopoly means they have a stranglehold over the mobile ecosystem, i.e., over operating systems, app stores and web browsers. The CMA says that there are many potential interventions which could help unlock competition and protect millions of businesses and people reliant on their services and it is taking targeted action to tackle some of the many problems. Further, the Government’s new pro-competition digital regime will give additional powers to the Digital Markets Unit to oversee key digital markets.

The CMA says that Apple and Google unilaterally determine the “rules of the game”, making it difficult for rival businesses such as browsers or alternative app stores to compete. Many companies have raised frustrations. The CMA found greater concerns with respect to Apple (as it imposes more direct restrictions), although Google also holds significant power.

Apple and Google’s stewardship has helped bring benefits for people and businesses, such as substantial investment and popular trusted products. However, the CMA says, there are also significant downsides, even if they are not always immediately obvious to people. Tens of thousands of UK businesses such as app and web developers, which rely on these ecosystems to serve their customers, face restrictions and terms that they have little choice but to accept. Consumers are likely to miss out on new innovations, have less choice, and ultimately face higher prices. Both Apple and Google are making substantial and growing profits, unabated for over a decade. This matters not only for people and businesses, but for the UK’s wider digital economy including tech start-ups struggling to get a foothold, the CMA says.

The CMA found that these problems are entrenched and will not go away unless steps are taken. It has identified a wide range of changes to open up competition in browsers and app distribution, remove or revise unnecessary restrictions, and introduce new safeguards aimed at ensuring fair and reasonable treatment of app developers.

The CMA is acting now to tackle concerns where possible using its existing powers. It is:

• consulting on a market investigation into mobile browsers and cloud gaming, both of which involve restrictions holding back potentially disruptive innovation (see item below); and
• taking further enforcement action, including opening a new investigation into Google’s app store payment practices, alongside its similar investigation into Apple, and will be launching further digital cases beyond the study.

The CMA says that there are no easy or quick fixes. A new ex ante regulatory approach is required to oversee these powerful tech firms and support the UK’s innovative tech sector. The CMA welcomes the Government’s commitment to establish a new regime with tailored powers to tackle these problems. To access the final report, click here.