The UK’s competition authority is addressing the dominance of Apple and Google in the mobile app market, aiming to dismantle what it terms an “effective duopoly.” The regulator has proposed changes that would enable app developers to guide users toward alternative payment methods outside of the traditional app stores. This move targets the restrictions currently in place, which limit competition by preventing developers from offering consumers potentially cheaper or varied purchasing options. Apple and Google currently levy commissions that can reach up to 30% on certain in-app transactions.
The Competition and Markets Authority (CMA) believes that by allowing “steering,” developers could gain more autonomy, potentially enhancing competition within the mobile app sector. Apple and Google run the primary platforms utilized by the vast majority of smartphone users in the UK. Some businesses, like Spotify, have already circumvented app store fees by redirecting customers to their websites, avoiding the hefty commission charges.
By removing these barriers, the CMA suggests that there could be more options available for both businesses and consumers. Additionally, the regulator is contemplating whether Apple should be required to provide broader access to its near-field communication (NFC) technology. This access could enable developers to create alternative contactless payment solutions for iPhone users.
Apple has pushed back on the proposed changes, arguing that they could compromise user security, privacy controls, and protection against scams. Meanwhile, Google has highlighted that it has already implemented some measures allowing developers to direct users toward external payment systems.
This initiative by the CMA is part of a broader move, following its decision to classify Apple and Google as possessing strategic market status. This classification provides the regulator with enhanced authority to enforce specific rules concerning their business operations.