Apple and Google hit by UK antitrust probe over mobile ecosystem
Omar Marcus Lightrocket | Getty Images
LONDON – Britain’s competition watchdog on Thursday launched an investigation into whether the tech titans breached the UK’s tough new digital competition rules into the mobile ecosystems of Apple and Google.
The UK’s Competition and Markets Authority said it was opening dual investigations into both US tech giants to assess whether they hold a “strategic market position” in their respective mobile ecosystems, including operating systems, app stores and smartphone-based browsers.
The investigations will “examine the impact on people using mobile devices and the thousands of businesses developing new services or content such as apps for these devices.” CMA said..
“Apple believes in rich and dynamic markets where innovation thrives,” an Apple spokesperson told CNBC. “We face competition in every segment and jurisdiction in which we operate, and our focus is always on the trust of our users.”
An Apple spokesperson added: “In the UK alone, the iOS app economy supports hundreds of thousands of jobs and enables developers large and small to find users on a trusted platform.” “We will continue to work constructively with the CMA as their work progresses on this matter.”
Google was not immediately available for comment when contacted by CNBC.
New powers
The CMA now has enhanced regulatory powers following the introduction of new UK legislation earlier this year called the Digital Markets, Competition and Consumer Act, or DMCC.
DMCC seeks to prevent anti-competitive behavior in digital markets. Large companies with a significant amount of market power in a particular digital activity can be labeled as having a “strategic market position”.
The CMA now has the power to make changes to prevent anti-competitive behavior from any firm given a strategic market position.
According to the regulator, almost all mobile devices sold in the UK are pre-installed with Apple’s iOS or Google’s Android operating systems, and their app stores and browsers have a unique or leading position compared to alternative products and services.
Almost all (94%) people aged 16 or over in the UK – around 56 million consumers – currently have access to a smartphone and the average Brit spends three hours a day using a mobile device, the CMA added.
The body said it will examine three key issues, including the extent of competition between Apple and Google’s mobile ecosystems, the technology giants’ channeling of market power into other activities, and the nature of exploitation.
“A more competitive mobile ecosystem can foster innovation and new opportunities across the range of services that millions of people use in app stores, browsers or operating systems,” CMA CEO Sarah Cardell said in a statement Thursday.
Cardell added: “Better competition can boost growth here in the UK, with businesses able to offer new and innovative products and services on the Apple and Google platforms.”