Apple and Google may face a formal investigation into their mobile ecosystem policies in the United Kingdom after a provisional study found that these policies are “holding back innovation.”
Following an investigation launched in 2022, an independent inquiry group of the U.K.’s Competition and Markets Authority (CMA) recommended that the CMA’s board consider launching a formal investigation of the companies’ activities, the CMA said in a Friday (Nov. 22) press release.
“Markets work best when rival businesses are able to develop and bring innovative options to consumers,” Margot Daly, chair of the CMA’s independent inquiry group, said in the release. “Through our investigation, we have provisionally found that competition between different mobile browsers is not working well and this is holding back innovation in the U.K.”
The investigation found that Apple’s rules regarding how browsers work on its iOS mobile operating system restrict competitors from delivering new, innovative features, according to the report.
It also found that a revenue-sharing agreement between Apple and Google reduces their incentive to compete in mobile browsers on iOS, and that both companies manipulate the presentation of browser choices to make their own browser the easiest option to select, per the report.
Reached by PYMNTS, Apple said in an emailed statement that it believes in “thriving and dynamic markets,” that it faces competition everywhere it operates and that it disagrees with the CMA’s findings.
“We are concerned that the interventions discussed in the report for future consideration under the Digital Markets, Competition, and Consumers Act would undermine user privacy and security and hinder our ability to make the kind of technology that sets Apple apart,” the statement said. “We will continue to engage constructively with the CMA as their work on this matter progresses.”
Google did not immediately reply to PYMNTS’ request for comment.
In a statement provided to Bloomberg, a Google spokesperson said: “Android’s openness has helped to expand choice, reduce prices and democratize access to smartphones and apps.”
The CMA’s independent inquiry group’s investigation also looked into mobile cloud gaming and found that there is no need for CMA intervention in that market, according to the release.
The regulator will accept comments on its provisional findings until Dec. 13 and expects to make a final decision in March 2025, per the release.
The CMA ramped up its antitrust investigation of Apple and Google in November 2022 after browser vendors, web developers and cloud gaming service providers told it that the status quo was harming their businesses and holding back innovation.
“Apple and Google have an effective duopoly on mobile ecosystems that allows them to exercise a stranglehold over these markets, which includes operating systems, app stores and web browsers on mobile devices,” the CMA wrote at the time.