UK watchdog tries to make mobile browsers competitive • The Register

The UK’s Competition and Markets Authority (CMA) said on Friday it intends to launch an investigation into Apple’s and Google’s market power in relation to mobile browsers and cloud gaming, and to take enforcement action against Google over its App Store payment practices.

“When it comes to how people use cell phones, Apple and Google have all the cards in their hands,” CMA chief executive Andrea Coscelli said in a statement. “As good as many of their services and products are, their powerful impact on mobile ecosystems allows them to foreclose on competitors, hold back the UK tech sector and limit choice.”

The decision to open a formal investigation follows the CMA’s year-long study of the mobile ecosystem. The competition regulator’s findings were published in a report concluding that Apple and Google have a duopoly that limits competition.

“We found that Apple and Google have significant and entrenched market power in mobile operating systems as there is limited effective competition between the two and competitors face significant barriers to entry and expansion,” the final report said [PDF] says.

This is the CMA’s third Google-facing request this year. In March, the CMA and the EU announced an investigation by Google and Meta (Facebook) into an alleged advertising collusion called Jedi Blue. And the CMA said it also looked into Google ad technology last month.

The CMA opened a competition investigation into Apple’s App Store terms and conditions in March 2021.

Back in March 2022, while the CMA was still accepting input from tech companies on how to proceed, Apple asked the UK regulator to consider the “often self-interested complaints from a limited number of the biggest market players” as Apple’s law, as Gibson Dunn put it.

Google also claimed that the status quo works well [PDF] while some of the CMA’s findings are being questioned. When asked for comment, a Google spokesperson said the company is considering the final report and will continue to work with the CMA — as if the alternative of ignoring authorities until they break down the doors was a viable option.

“Android phones give people and businesses more choices than any other mobile platform. Google Play has been the launch pad for millions of apps, helping developers create global companies that support a quarter of a million jobs in the UK alone,” said a Google spokesman. “We regularly review how best to support developers and have responded quickly to CMA feedback in the past.”

Apple did not respond to a request for comment.

set limits

The UK earlier this year delayed defining the legal powers of the Digital Markets Unit set up within the CMA last year to oversee big tech. This leaves the CMA to pursue these matters within its own powers, at least until such time as the role of the DMU is defined.

Apple and Google’s investigations in the UK coincide with numerous competition inquiries from other countries, as well as legislation and lawsuits. South Korea has required Apple and Google to allow third-party in-app payments. The Netherlands has taken similar steps specifically for dating apps. Japan’s Fair Trade Commission has forced Apple to allow reader apps payments outside of the app store and last year began investigating anticompetitive behavior in the mobile ecosystem, centered on Apple and Google.

Various bills that would regulate Apple and Google, among others, are under consideration by US lawmakers, and the Justice Department is pursuing an antitrust case against Google over its advertising business, as are a number of US state attorneys general.

The EU’s Digital Markets Act and Digital Services Act contain new rules designed to encourage competition, such as banning Apple’s iOS requirement for all mobile browsers in the App Store to be based on the company’s WebKit engine.

The UK CMA also expressed an interest in addressing competition issues related to web technology, specifically the unfairness of private browser APIs, the diversity of browser engines, and ensuring web apps can implement the same functionality as native apps.

“There are strong arguments for demanding a level playing field between Apple’s browser (Safari) and third-party browser apps, regardless of whether the WebKit restriction is lifted,” the final report reads. “We would therefore expect that there should be comparable API access between Safari and other browsers using WebKit.”

“There are also strong general arguments for a level playing field between feature availability for native app developers and web app developers. After the WebKit restriction is lifted, competition can help raise standards on iOS, but there may still be some features that would still be restricted in iOS or Android, and in some cases there could be good reasons why, to require parity with the treatment of native apps.

In a blog post, Tom Smith, a lawyer at Geradin Partners, a London and Brussels-based competition law firm, argues that CMA appears to have made a good choice by focusing on narrow aspects of the mobile ecosystem, rather than trying to rewrite the rules to write app stores in one fell swoop.

“It seems at first glance that browsers and cloud gaming are smart choices for intervention,” Smith said. “These are areas where the CMA can add value as they have not been the subject of detailed scrutiny internationally, and the CMA clearly has some targeted remedial actions in mind that it believes can be successfully enforced.”

Japanese authorities are also considering removing Apple’s iOS browser restrictions in the latest Mobile Ecosystem Interim Report Summary competitive assessment.

“It might be possible to introduce a rule that prohibits an operating system vendor from requiring third-party browsers to use a specific browser engine,” the report said [PDF] says.

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