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Online platforms underpinning the dominance of Apple and Google will come under scrutiny in the U.K. from a regulator with a record of securing changes from Big Tech.
The Competition and Markets Authority, or CMA, announced on Tuesday that it had opened a study into the “effective duopoly” that Google
GOOGL,
— owned by Alphabet — as well as Apple
AAPL,
have over the major gateways to the internet.
The regulator will investigate whether the technology giants’ control over operating systems, app platforms, and web browsers — called “mobile ecosystems” — results in harm to consumers or the stifling of competition on digital platforms.
“Apple and Google control the major gateways through which people download apps or browse the web on their mobiles — whether they want to shop, play games, stream music or watch TV,” said Andrea Coscelli, the chief executive of the CMA. “We’re looking into whether this could be creating problems for consumers and the businesses that want to reach people through their phones.”
The two tech giants are by far the most dominant companies when it comes to controlling access to the internet, especially via mobile devices.
Essential reading: Tech Giants Face a Tough New Regulator in the U.K. Here’s Why it Matters.
Most people use a mobile device running on one of their operating systems — iOS or Android, respectively — and download applications from either the App Store or Google Play. The two groups’ web browsers, Safari from Apple and Google’s Chrome, are similarly popular on both mobile and desktop devices.
The CMA said its concern is that this level of dominance could lead to reduced innovation and consumers paying higher prices for devices and apps. The regulator will also investigate whether consumers may be paying higher prices for other goods and services due to associated advertising costs.
In addition, the CMA’s study will target whether Google and Apple’s market power has knock-on effects on other businesses, such as app developers.
The study, which could lead to recommendations to government or the issuance of guidance to businesses, must be concluded within 12 months, and the regulator is welcoming views on the issue until Jul. 26.
In response to the investigation, a Google spokesperson said that “Android provides people with more choice than any other mobile platform in deciding which apps they use, and enables thousands of developers and manufacturers to build successful businesses.”
“We welcome the CMA’s efforts to understand the details and differences between platforms before designing new rules,” the spokesperson added.
Apple didn’t immediately respond to a request for comment.
The move from the CMA comes amid a flurry of regulatory pressure on Big Tech in the U.K. as well as in the European Union. On Jun. 11, the CMA announced that it would have a key role in overseeing Google’s plans to remove third-party cookies — which track user data — from Chrome, as part of commitments to overcome competition concerns.
And on Jun. 4, regulators in both the U.K. and EU opened formal investigations into Facebook over whether it unfairly used user data to help its classified ads platform, Marketplace, beat out the competition. In the U.K., that investigation will also look into Facebook’s
FB,
new dating platform.
“Our ongoing work into big tech has already uncovered some worrying trends and we know consumers and businesses could be harmed if they go unchecked,” Coscelli said.
In April, EU regulators charged Apple with abusing its dominant position in the music-streaming market by imposing restrictive rules on the App Store, in a landmark move. The CMA has had a similar ongoing probe into the App Store since March. The cases follow a similar pattern to a legal suit Apple faces in the U.S., where it was sued by Epic Games, the developer of the popular videogame “Fortnite,” over App Store restrictions.
In the U.K., the CMA launched a new body to regulate Big Tech in April. The Digital Markets Unit is expected to have the power to levy fines by next year.
