The Competition and Markets Authority (CMA) has published a set of proposals and a roadmap outlining actions it will take to enable fair competition in the smartphone market. The publication of the roadmap comes ahead of the CMA’s decision later this year on whether Apple and Google will be given Strategic Market Service (SMS) status.
In a blog post, Will Hayter, executive director for strategic markets at the CMA, discussed the importance of the mobile app economy to the UK, which generates 1.5% of gross domestic product (GDP) and supports 400,000 jobs: “It is essential that this part of the digital economy works well to ensure UK consumers benefit from the latest innovations and a high-quality user experience, as well as more choice and lower prices.”
To designate a firm with SMS, the CMA needs to demonstrate that it meets two legal tests: “Substantial and entrenched market power” and a “position of strategic significance”. In the blog post, Hayter said the CMA had “provisionally found both Apple and Google to have met these tests in relation to mobile platforms”.
One of the CMA’s key priorities is to ensure app developers get a fair deal on the Google Play Store and Apple App Store to distribute their apps in a way that does not damage their business model.
The CMA’s roadmap calls for a fair and transparent app review process and app store rankings to give UK app developers certainty, which would enable users to make purchases outside of app stores. According to the CMA, this could potentially drive innovation and financial savings for developers.
The roadmap also covers interoperability, to ensure UK app developers have interoperable access to key Apple functionality. Following an in-depth investigation into the mobile browser market, the resulting CMA report noted that third-party web browsers running on Apple’s iOS need to use its underlying WebKit browser engine, which determines what competing mobile browsers can do on iOS.
Apple and Google’s mobile platforms are both critical to the UK economy … but our investigation so far has identified opportunities for more innovation and choice Sarah Cardell, Competition and Markets Authority
The roadmap additionally aims to address Apple restrictions on digital wallets to ensure UK fintech firms can compete, and enable connected devices such as smartwatches and gaming headsets to seamlessly connect with smartphones.
Hayter said the CMA would also explore the factors likely to be important for the development of artificial intelligence (AI) services, such as voice assistants on mobile devices, to ensure a level playing field in this rapidly advancing sector.
“Any action we take must be proportionate to tackle the harms and part of a participative process, including the largest firms, broader market participants, and consumer groups,” he stated in the blog.
Sarah Cardell, chief executive of the CMA, said: “Apple and Google’s mobile platforms are both critical to the UK economy – playing an important role in all our lives, from banking and shopping to entertainment and education. But our investigation so far has identified opportunities for more innovation and choice.
“The targeted and proportionate actions we have set out today would enable UK app developers to remain at the forefront of global innovation while ensuring UK consumers receive a world-class experience. Time is of the essence – as competition agencies and courts globally take action in these markets, it’s essential the UK doesn’t fall behind.”
