UK’s Regulatory Body Concludes Investigations into Apple and Google, Plans to Address App Store Issues with New Powers

In a recent announcement from the U.K.’s regulatory body on Wednesday, Apple and Google received news that will allow them to momentarily ease their concerns. The investigations into their individual mobile application markets have been discontinued, attributed to shifting regulatory priorities.

Initiating in March 2021, the U.K.’s Competition and Markets Authority (CMA) delved into Apple’s practices regarding app distribution on its iOS and iPadOS platforms, particularly concentrating on the App Store’s developer terms and conditions. By June 2022, similar scrutiny extended to Google’s management of app dissemination on Android platforms, including its Play Store’s in-app purchase billing requirements. The CMA expressed its concerns that such terms and conditions might unjustly restrict developer options.

Concerns were also raised by the CMA about the duopolistic control over mobile ecosystems by the two tech behemoths.

However, the investigations have now ceased with no further actions taken.

Despite this brief reprieve for Apple and Google from these specific regulatory inquiries, the closure comes with an anticipation of strengthened regulatory frameworks. The CMA suggests the near arrival of new powers intended to mitigate abusive practices by dominant market figures.

In a press announcement, the CMA disclosed its plans to address app store-related concerns through the forthcoming digital markets regime.

The CMA further indicated that its preliminary work under this new digital competition framework would benefit from its investigative experiences, hinting at Apple and Google being prime candidates for these future regulatory interventions.

Will Hayter, the CMA’s executive director for digital markets, stated, “With the advent of the new pro-competition digital markets regime, we’re poised to address our identified concerns with the application of new regulatory powers.”

He highlighted the importance of ensuring that U.K. tech entities, including app developers, operate within a fair and competitive ecosystem. This vision is crucial for sectoral growth, investment, and improved consumer outcomes in the U.K., Hayter added, as the CMA prepares for its initial inquiries under the revamped legislation.

The overhaul of the U.K.’s digital markets policy has been underway for some time, receiving formal approval as far back as November 2020. Despite legislative hiccups linked to political instabilities, recent developments have catalyzed progress, leading to the accelerated enactment of the Digital Markets, Competition and Consumer bill just before the May 2024 general elections. This sets the stage for the CMA to exercise significant regulatory authority over Big Tech, anticipated to start “later this year.”

Considering the recent passing of the Digital Markets, Competition and Consumers Act (DMCCA) in May, the CMA has, in accordance with its focus on administrative priorities, chosen to halt its ongoing investigations into Google’s Play Store and Apple’s App Store guidelines.

Upon potential designation of Apple or Google as entities with ‘strategic market status’ in mobile sector activities, the CMA will engage its new powers to conduct a comprehensive analysis of issues noted by stakeholders, determining necessary interventions.

However, U.K. developers eager for immediate measures against the Apple and Google duopoly might have to wait. The DMCCA mandates the CMA to evaluate if a company’s market power reaches a ‘strategic market status’, before implementing the regulatory regime.

Initial investigations to establish this status are expected within the first year of the new regime’s effectiveness. Thus, a considerable delay remains before any substantive regulatory crackdown on Big Tech in the U.K. proceeds.

In a noteworthy move reflecting on possible stringent future regulations, the CMA dismissed certain concessions proposed by Google concerning Play Store policies. The refusal signals the CMA’s intention to retain broad remedial powers under the forthcoming digital markets regime, particularly if Google is identified as having strategic market status.

Google’s proposal, which aimed to offer app developers alternative payment methods to Play’s billing system, did not align with the CMA’s competition remedies after feedback from developers. This decision underscores the anticipated robust stance of the U.K. in regulating tech giants under the new DMCCA framework.

As the CMA prepares to shape potential interventions for designated tech giants, the U.K. stands on the cusp of distinct regulatory methodologies from the EU’s Digital Markets Act (DMA), with the latter having already implemented regulations on designated gatekeepers since March. Thus, the U.K. navigates its own path in addressing tech platform dominance amidst international precedents.