UK Competition Authority Concludes Apple and Google Investigations, Eyes New Regulatory Powers

The UK’s Competition and Markets Authority (CMA) has announced the conclusion of its investigations into Apple and Google’s app ecosystems, signaling a major policy change. The CMA’s decision to close these high-profile probes—launched in March 2021 for Apple and June 2022 for Google—reflects a strategic pivot towards utilizing new regulatory tools set to be introduced under the forthcoming digital markets regime.

The CMA’s investigations had scrutinized Apple’s App Store practices and Google’s Play Store regulations, focusing on concerns that their terms and conditions might unfairly restrict developer options.

“The CMA opened these cases because it is concerned that Google and Apple are using their market positions via the Play Store and App Store respectively to set terms which may be unfair to UK app developers and which may restrict competition and consumer choice, potentially leading to higher prices and reduced choice for app users.  The cases focused on the rules that require app developers offering digital content, such as games, to use Google Play’s or Apple’s own billing systems for in-app purchases, which the CMA is concerned limit developers’ choice of payment solution and make it more difficult for them to deal directly with their customers,” the DMA said.

Despite previous findings that highlighted significant concerns about the mobile duopoly controlled by these tech giants, the regulator has decided to halt these specific inquiries. The closure of these cases comes as the CMA prepares to leverage newly granted powers designed to address competition issues in the digital sphere more comprehensively.

The UK is on the brink of rolling out a new competition framework under the Digital Markets Competition and Consumer Act (DMCCA), which has been a long time in the making. This legislation, fast-tracked through Parliament ahead of the May 2024 general election, will equip the CMA with enhanced authority to regulate tech giants deemed to have “strategic market status” (SMS). This shift aims to address broader competitive imbalances within the tech sector, moving beyond the scope of the CMA’s previous investigations.

In a statement, Will Hayter, the CMA’s executive director for digital markets, emphasized that the new regime would allow for a more holistic approach to regulating major tech platforms. The CMA plans to use these new powers to address ongoing concerns about the fairness and competitiveness of app ecosystems, leveraging insights gained from previous investigations into Apple and Google.

The DMCCA introduces a more tailored regulatory approach compared to the European Union’s Digital Markets Act (DMA), which has already imposed strict rules on designated gatekeepers such as Apple and Google. The UK’s approach will offer the CMA greater flexibility to impose specific interventions based on the unique dynamics of each platform, setting it apart from the EU’s more rigid regulatory framework.

As the CMA moves towards applying its new regulatory powers, the focus will be on determining whether Apple and Google meet the criteria for SMS. This designation will trigger the application of the DMCCA’s provisions, potentially leading to more targeted remedies and interventions. However, developers and stakeholders will likely face a waiting period as the CMA conducts its initial investigations under the new regime, with several months potentially required to assess and designate market status.