REG - Competition and Mkts - CMA update on mobile ecosystems

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10/06/2022 11:30

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RNS Number : 4782O  Competition and Markets Authority  10 June 2022

FOR IMMEDIATE RELEASE: FRIDAY 10 JUNE 2022

CMA plans market investigation into mobile browsers and cloud gaming

 

·    Apple and Google "hold all the cards" with interventions needed to
give innovators and competitors a fair chance to compete in mobile ecosystems

 

The Competition and Markets Authority (CMA) is consulting on the launch of a
market investigation into Apple and Google's market power in mobile browsers
and Apple's restrictions on cloud gaming through its App Store. In parallel,
it is also taking enforcement action against Google in relation to its app
store payment practices.

 

This follows a year-long study of the companies' mobile ecosystems, the final
report
(https://www.gov.uk/government/publications/mobile-ecosystems-market-study-final-report)
of which has been published today. The study found that Apple and Google have
an effective duopoly on mobile ecosystems that allows them to exercise a
stranglehold over these markets, which include operating systems, app stores
and web browsers on mobile devices.

 

Without interventions, both companies are likely to maintain, and even
strengthen, their grip over the sector, further restricting competition and
limiting incentives for innovators.

 

While the report identified a range of potential interventions across these
ecosystems, the CMA has looked at where it can take immediate targeted action
to tackle these problems using its current powers. As a result, the CMA is now
consulting on making a market investigation reference into mobile browsers and
access to cloud gaming on mobile devices.

 

Andrea Coscelli, Chief Executive of the CMA, said:

 

"When it comes to how people use mobile phones, Apple and Google hold all the
cards. As good as many of their services and products are, their strong grip
on mobile ecosystems allows them to shut out competitors, holding back the
British tech sector and limiting choice.

 

"We all rely on browsers to use the internet on our phones, and the engines
that make them work have a huge bearing on what we can see and do. Right now,
choice in this space is severely limited and that has real impacts -
preventing innovation and reducing competition from web apps. We need to give
innovative tech firms, many of which are ambitious start-ups, a fair chance to
compete.

 

"We have always been clear that we will maximise the use of our current tools
while we await legislation for the new digital regime. Today's announcements -
alongside the 8 cases currently open against major players in the tech
industry, ranging from tackling fake reviews to addressing problems in online
advertising - are proof of that in action."

 

Mobile browsers

 

Browsers are powered by an 'engine,' which is fundamental to browser
performance. 97% of all mobile web browsing in the UK in 2021 happens on
browsers powered by either Apple's or Google's browser engine. Apple bans
alternatives to its own browser engine on its mobile devices; a restriction
that is unique to Apple. The CMA is concerned this severely limits the
potential for rival browsers to differentiate themselves from Safari (for
example, on features such as speed and functionality) and limits Apple's
incentives to invest in its browser engine.

This restriction also seriously inhibits the capability of web apps - apps
that run on a browser rather than having to be individually downloaded -
depriving consumers and businesses of the full benefits of this innovative
technology. Mobile devices also typically have either Google's Chrome or
Apple's Safari pre-installed and set as default at purchase, giving them a key
advantage over other rival browsers. Apple and Google both have strong
positions in mobile web browsing, with a combined share of supply of around
90% for their browsers.

Cloud gaming

 

Apple has also blocked the emergence of cloud gaming services on its App
Store. Like web apps, cloud gaming services are a developing innovation,
providing mobile access to high-quality games that can be streamed rather than
individually downloaded. Gaming apps are a key source of revenue for Apple and
cloud gaming could pose a real threat to Apple's strong position in app
distribution. By preventing this sector from growing, Apple risks causing
mobile users to miss out on the full benefits of cloud gaming.

 

During its market study, the CMA heard concerns from a number of UK businesses
and start-ups who said that the restrictions in relation to mobile browsers
and cloud gaming make it harder for them to innovate and compete in these
markets.

 

The proposed market investigation will further assess the competition concerns
identified to date in both areas and decide what, if any, action is
appropriate. This could include making legally binding orders requiring
changes to be made to Apple's and Google's practices.

 

Enforcement action

 

In parallel, the CMA is also today launching a competition law investigation
into Google's rules governing apps' access to listing on its Play Store, in
particular regarding conditions Google sets for how users can make in-app
payments for certain digital products. Separately, the CMA has an existing
competition law investigation underway in relation to Apple's App Store terms
and conditions, which it opened in March 2021.

 

The consultation on the proposed the market investigation reference will close
on 22 July at 5pm.

 

For more information, visit the Mobile Ecosystems market study page
(https://www.gov.uk/cma-cases/mobile-ecosystems-market-study) and
investigation into suspected anti-competitive conduct by Google
(https://www.gov.uk/cma-cases/investigation-into-suspected-anti-competitive-conduct-by-google)
.

 

Notes to Editors

1.   A market investigation by the CMA is an in-depth investigation led by a
group drawn from the CMA's panel of members. The CMA must conclude a market
investigation in 18 months from the date that the reference is made. This is
extendable by 6 months in exceptional circumstances. The process and general
approaches to analysis in market investigations are set out in the market
investigation guidelines.

2.   Market investigations consider whether there are features of a market
that have an adverse effect on competition (AEC). If there is an AEC, the CMA
has the power to impose its own remedies on businesses and it can also make
recommendations to other bodies such as sectoral regulators or the government
- when legislation might be required for example. The CMA has wide powers to
change the behaviour of firms, such as governing the way a product is sold in
a particular market and the information that is available to customers buying
that product. The CMA also has the power to impose structural remedies which
can require companies to sell parts of their business to improve competition.

3.   All media enquiries should be directed to the CMA press office by email
on press@cma.gov.uk (mailto:press@cma.gov.uk) , or by phone on 020 3738 6460.

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