Report from the Wall Street Journal
In Brief – The UK Competition and Markets Authority (CMA) has proposed designating the mobile ecosystems run by Apple and Google as having “strategic market status” (SMS) under the Digital Markets, Competition and Consumer’s Act (DMCC) regime designed to protect competition in digital markets. The regulator has been investigating the two mobile businesses since 2022. The regulator believes that Apple and Google hold an “effective duopoly,” with 90-100% of mobile devices in Britain running on one of their mobile platforms, and that businesses and consumers face a range of problems such as unpredictable app reviews, inconsistent app store search rankings and commissions on in-app purchases of as much as 30%. The CMA unveiled “roadmaps” for Apple and Google outlining possible measures to improve competition, including “fair and transparent” app reviews and app store rankings and allowing app developers to “steer” users to other platforms to make purchases, potentially avoiding the commissions charged by the two giants. Both companies expressed disappointment with the CMA determinations. The CMA is accepting public comments on their proposals and final decisions are planned for October.
Context – Of course the Apple and Google mobile ecosystems are being designated SMS platforms. Regulating them was a main goal of the DMCC. Same for Google’s search service. And Amazon and Microsoft cloud services. The DMCC is the UK equivalent of the EU Digital Markets Act (DMA). The DMA imposes 18 high-level mandates on “core platform services” of “gatekeeper” companies. Specific DMA requirements are being created on the go via investigations by the European Commission. The DMCC process is to establish tailored rules for each SMS platform and then enforce them. These CMA proposals for Apple and Google are part of that process. While setting up UK digital regulatory regimes that largely parallel the EU, the Starmer Government is trying to create the impression that the UK is more digital business friendly. For example, the Chair of the CMA was sacked earlier this year and the government is aggressively promoting AI investment.