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,
the Competition and Markets Authority said in a statement.
“Without interventions, both companies are likely to
maintain, and even strengthen, their grip over the sector … further restricting
competition and limiting incentives for innovators,” it added.
Mobile web browsers are designed to display web content most
efficiently on small screens used on mobile devices such as smartphones or
personal digital assistants.
Mobile devices typically have either Google’s Chrome or
Apple’s Safari mobile browsers pre-installed and set as default at purchase,
giving them a key advantage over rival browsers.
As of February, Chrome and Safari mobile browsers commanded
62 per cent and 26 per cent global market share, respectively, according to
figures compiled by Statista.
Last year, nearly 97 per cent of all mobile web browsing in
the UK was powered by either Apple’s or Google’s browser engine.
The Cupertino-based iPhone maker does not allow alternatives
to its own browsing engine on its mobile devices. The CMA said it 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 deprives consumers and businesses of the full benefits
of this innovative technology, it added.
“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,” Andrea Coscelli, the
CMA’s chief executive, said.
“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.”
The CMA said it had heard concerns from several UK businesses
and start-ups which said that the restrictions related to mobile browsers and
cloud gaming made it harder for them to innovate and compete.
The proposed market investigation that “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, the CMA said.
The CMA on Friday said it is also launching a competition
law investigation against Alphabet-owned Google in relation to its app store
payment practices. Separately, the CMA has an existing competition law
investigation in relation to Apple’s app store terms and conditions, which it
opened in March last year.