Apple and Google Under CMA Scrutiny for Possible Competition Concerns
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On 15 June 2021, the Competition and Markets Authority (CMA) announced a market study into Apple’s and Google’s mobile ecosystems. A market study allows the CMA to examine if a market is working well and if not, provide further actions necessary to address the concerns that are raised.
A ‘mobile ecosystem’ is a collection of multiple devices, software and technologies that allow users to have access to products, content and services, such as music, video streaming, banking and shopping.
The CMA is investigating whether Apple’s and Google’s operating systems (iOS and Android), app stores (App Store and Play Store), and web browsers (Safari and Chrome), result in both companies having too much control over their respective mobile ecosystems, potentially, resulting in higher prices for customers when purchasing devices and apps, and also inflated prices when buying goods and services due to higher advertising prices.
This market study has been launched in the context of the CMA’s ongoing focus on digital markets. In 2019, the CMA published its first Digital Markets Strategy, seeking to ensure that consumers continue to get good outcomes in digital markets through competition and innovation. Since then, the CMA has, among other things, conducted a market study into online platforms and digital advertising (focusing principally on Google and Facebook), launched an investigation into Google’s proposed changes to its support for third party cookies in its Chrome browser and Chromium browser engine, and has established its new Digital Markets Unit to promote greater competition and innovation within the sector (although the DMU has yet to be given formal powers, which will require new legislation). Additionally, the CMA has continued to apply a tight rein to mergers in the sector.
The CMA’s continued focus on digital markets mirrors that of other competition authorities around the world. For example, in June, the French competition authority fined Google €220m (£190m) for abusing its dominance in the online advertising market by favouring its own tools for buying and selling adverts online over those of rivals. Google has also been subject to fines totalling €8.2 billion imposed by the European Commission for competition law infringements: in 2019 it was fined €1.5bn for blocking rival online search advertisers; in 2018, it was fined €4.3bn for using its Android mobile operating system to block rivals; and, in 2017, it was fined €2.4bn for hindering rival shopping comparison websites. Apple, meanwhile, is subject to investigation by the European Commission, which has expressed concerns that it has abused its dominant position for the distribution of music streaming apps through its App Store, by forcing app developers to use Apple's own in-app purchase mechanism and by restricting developers from informing iPhone and iPad users of alternative, cheaper purchasing possibilities.
This market study represents the CMA’s latest intervention in the digital markets sector. It is unlikely to be the last – further market studies, infringement investigations and robust assessments of mergers are likely.
The CMA has 12 months to finalise the study and any updates can be found on the CMA ‘Mobile Ecosystem’ page - Mobile ecosystems market study - GOV.UK (www.gov.uk)
If you have any questions or concerns about the issues mentioned, please do not hesitate to contact us.
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