REG - Competition and Mkts - CMA Update: App Store CA98 cases

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21/08/2024 12:00

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RNS Number : 2784B  Competition and Markets Authority  21 August 2024

FOR IMMEDIATE RELEASE - 11h00 WEDNESDAY 21 AUGUST 2024

CMA looks to new digital markets competition regime to resolve app store
concerns

Competition Act cases closed ahead of new digital markets regime coming into
force.

·    CMA closes investigation into Google, and parallel Apple case, and
instead expects to consider concerns under the new digital markets competition
regime

·    CMA had consulted on proposed commitments from Google, but these
failed to sufficiently address concerns

The Competition and Markets Authority (CMA) has closed its existing
Competition Act cases into Google's Play Store and Apple's App Store as it
plans for the roll out of the new digital markets competition regime.

While the CMA has not taken any decisions on what digital activities or harms
it will tackle first, it anticipates that its early work under the new digital
markets competition regime will build on and leverage its experience in areas
it has already studied, such as mobile ecosystems, which includes app stores.

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 move comes at the same time as the CMA rejects commitments submitted by
Google in response to the CMA's concerns. Google's proposals would have given
app developers the ability to use alternative payment options to Google Play's
billing system, under proposals known as 'Developer-only Billing' (DOB) and
'User Choice Billing' (UCB).

Having consulted app developers, and after reviewing their feedback as well as
the available evidence, the CMA is not satisfied that Google's proposed
commitments address its competition concerns effectively.

Feedback from app developers suggested Google's proposals to allow app
developers to use alternative payment methods for in-app payments did not go
far enough and they would in practice remain tied to the Google payment
system. In particular, app developers referred to the level of commission they
would still be paying to Google, and to the proposed 'pop-up screens' that
might put users off completing a transaction.

In light of recent developments, in particular the passing in May of the
Digital Markets, Competition and Consumers Act (DMCCA), the CMA has assessed
its existing Competition Act investigation into Google's Play Store and its
parallel case into Apple's App Store rules against its administrative
priorities and decided to close these cases at this point. Should Apple or
Google each or both be designated as having 'strategic market status' in
connection with any digital activities in the mobile sector, the CMA will be
able to use its new powers to consider the range of issues raised by parties
more holistically than it otherwise could under these specific Competition Act
investigations. This will also enable the CMA to consider what, if any,
interventions may be needed following any designation.

Will Hayter, Executive Director for Digital Markets at the CMA, said:

"Once the new pro-competition digital markets regime comes into force, we'll
be able to consider applying those new powers to concerns we have already
identified through our existing work.

"It's critical that tech businesses in the UK, including app developers, can
have access to a fair and competitive app ecosystem, helping to grow the
sector, boost investment and result in better outcomes for UK consumers. These
are all factors we are considering before launching our first investigations
under the new regime."

More information can be found on the Google Play Store
(https://www.gov.uk/cma-cases/investigation-into-suspected-anti-competitive-conduct-by-google)
and Apple AppStore
(https://www.gov.uk/cma-cases/investigation-into-apple-appstore) case pages.

-ENDS-

NOTES TO EDITORS

1.   As set out in its provisional approach to implement the new digital
markets competition regime overview paper
(https://www.gov.uk/government/publications/overview-of-the-cmas-provisional-approach-to-implement-the-new-digital-markets-competition-regime)
, published in January 2024, the new regime gives the CMA the ability to
impose requirements on the conduct of firms in digital markets where those
firms have been designated as having Strategic Market Status - and to impose
significant fines against firms if those requirements are breached.

2.   In that paper, the CMA also confirmed it expects to launch around 3 to
4 SMS investigations within the first year of the new digital markets
competition regime coming into force, which is expected later this year.

3.   No decision has yet been taken as to the digital activities or firms
that will be investigated by the CMA for possible SMS designation once its
DMCCA powers are in force.

4.   The CMA has closed the Competition Act cases into Google's Play Store
and Apple's App Store on the grounds of administrative priorities and has not
taken any decisions as to whether the Competition Act 1998 has been infringed.

5.   For media enquiries contact the CMA press office on 0203 738 6460 or
press@cma.gov.uk (mailto:press@cma.gov.uk) .

 

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