Apple, Google Mobile Ecosystems Face U.K. Probe Under New Tech Rules
By Edith Hancock
The U.K.'s Competition and Markets Authority is investigating mobile ecosystems controlled by Apple and Alphabet's Google to work out if they need to obey a strict new law governing digital competition.
The CMA said Thursday the probes will assess the companies' dominance in spaces like mobile phone operating systems, app stores and web browsers and explore their impact on smartphone users as well as developers that rely on those devices to make money. If the investigations determine that the companies have what it calls 'strategic market status,' it can impose bespoke rules on them under the new law.
This is the second round of investigations the watchdog has launched under the Digital Markets, Competition and Consumers Act, a new U.K. law designed to curb the outsized market power of the world's largest technology companies. The law bans tech giants the CMA deems as having strategic market status in the digital economy from favoring their own products and services over those of rivals.
The CMA's started enforcing the new rules this year by opening an investigation into Google's search services on Jan. 14.
An Apple spokesperson said the tech giant faces competition in every segment and jurisdiction where it operates and its priority is customers' trust. "We will continue to engage constructively with the CMA as their work on this matter progresses," they said.
Google said that it would work constructively with the CMA. "We welcome the opportunity to set out Android, Chrome and Play's support for users, businesses and the wider mobile ecosystem in the U.K.," the company wrote in a blog post on Thursday.
The CMA said that roughly 15,000 businesses in the U.K. are involved in the development of apps used on mobile devices, generating a total revenue of around 28 billion pounds ($34.48 billion).
"The operating systems, apps and browsers installed on our phones and tablet devices act as our gateway into the digital world - whether that is communicating with our friends and loved ones, buying from businesses or accessing creative content," Sarah Cardell, the CMA's chief executive, said in a statement.
The regulator wants to get a better idea of how much Apple and Google compete against each other through their mobile ecosystems, what barriers are stopping smaller players from offering competing products on their platforms, and whether Apple and Google are exploiting their dominance in the space by giving developers unfair business terms to sell through their app stores.
It also said it would check whether the companies are using certain design tactics to nudge users into choosing their own apps such as the Safari and Chrome browsers instead of competing alternatives.
Alongside these investigations, the CMA will investigate whether it should impose certain conduct requirements on the companies under the new law. That could mean forcing Apple or Google to open up key functionality features on their smartphone operating systems to app developers or letting users download apps outside of their own app stores.
It set an Oct. 22 deadline to end both investigations, and is seeking comments from other industry players about the probes until Feb 12.
The CMA's DMCC probes come as the European Commission enters the final stages of investigations into Apple, Google and Meta under its own tech competition rulebook, the Digital Markets Act.
Write to Edith Hancock at edith.hancock@wsj.com