The U.K. competition watchdog has recently announced the closure of its investigations into Apple and Google’s mobile app ecosystems. This decision was made due to administrative priorities, putting a temporary hold on any potential actions against the tech giants. The investigations had been ongoing since March 2021, focusing on Apple’s App Store terms and conditions as well as Google’s Play Store rules for in-app purchases. Concerns were raised about how these terms may limit developers’ choices and the potential impact of the mobile duopoly the two companies hold.
While Apple and Google may be breathing a sigh of relief now, the Competition and Markets Authority (CMA) has hinted at using new competition powers in the future. The upcoming digital markets regime will enable the CMA to apply special abuse controls on tech giants with strategic market power. This suggests that Apple and Google could be the first targets for such interventions under the new regime. The CMA emphasized the importance of maintaining a fair and competitive app ecosystem for businesses and consumers in the U.K., signaling that tougher measures could be on the horizon.
The U.K.’s digital markets regime has been in development for years, facing delays before finally being passed as the Digital Markets, Competition and Consumer Act (DMCCA). This legislation grants the CMA the authority to crack down on Big Tech companies once the regime is enforced. Apple and Google’s cases under the Competition Act investigation have been closed for now, pending further designations of “strategic market status” in the mobile sector. The CMA will continue to assess market power and potential interventions under the new regime.
Despite the regulatory changes, developers in the U.K. will have to wait for further investigations to determine the market power of tech giants like Apple and Google. The CMA aims to undertake several investigations to identify strategic market status within the first year of the regime. This process could lead to delays in potential crackdowns on Big Tech, as the regulator evaluates market conditions and the need for interventions.
Under the new approach, platform operators face tougher operating conditions, as seen in the rejection of Google’s commitments regarding Play Store terms. The CMA deemed Google’s proposals insufficient in addressing competition concerns effectively, highlighting the need for alternative payment options for developers. The rejection of these proposals indicates a stricter stance on platform power and a focus on maintaining a competitive landscape for app developers.
The U.K.’s bespoke interventions under the DMCCA set it apart from the more prescriptive approach of the Digital Markets Act (DMA) in the European Union. While the EU’s DMA has applied strict rules to designated gatekeepers like Apple and Google, the U.K. remains behind in addressing platform power. The CMA’s future interventions on tech giants will be closely watched, as the regulator navigates the complexities of the digital markets landscape and strives to create a level playing field for all stakeholders.
While Apple and Google may have dodged immediate regulatory actions in the U.K., the challenges posed by the evolving digital markets regime and the need for fair competition could lead to tougher measures in the future. The CMA’s focus on ensuring a competitive app ecosystem and addressing concerns related to market power will shape the regulatory landscape for tech giants in the U.K. Developers and consumers alike will be impacted by the outcomes of these investigations and interventions, highlighting the importance of maintaining a balanced and competitive digital marketplace.