The British Competition and Market Authority (CMA) formally recognized apples and Google as “strategic market status” in their mobile ecology on Wednesday. The decision covers core operations such as operating systems, application shops, browsers and browser engines, and will empower regulators to take targeted measures to enhance market competition.
CMA launched a survey of two science and technology giants in January of this year, and the intervention programme proposed in July foresaw the possible granting of strategic market status (SMS). Through consultations with more than 150 relevant institutions and direct communication with enterprises, the regulators have concluded that the two companies “have strong market power and strategic importance on their respective mobile platforms”. The survey found that mobile equipment users in the United Kingdom rarely switch across platforms after selecting ecosystems. CMA stressed that both platforms require developers to reach users through the official application store distribution process. It is noteworthy that the report makes clear that new technologies, such as artificial intelligence, “can hardly weaken the market power of the two giants in the next five years of the regulatory cycle”. The Executive Director of the CMA Digital Markets, Will Hayt, stated: “During thousands of businesses throughout the industry rely on these two mobile platforms to market products and services to millions of consumers, but platform rules may be limiting innovation and competition.”
At the same time, the regulator clarified that the SMS determination does not in itself constitute a violation judgement, but rather paves the way for the implementation of “proportionally targeted interventions” aimed at “ensuring that mobile platforms are open to effective competition and that consumers and businesses that rely on Google and Apple are treated fairly”. Both companies objected to the decision. Apple warns that this will result in British users not having immediate access to new functionality — the delay in the roll-out of Apple intelligence in the EU is a precedent. Google, for its part, states that it “can’t understand the legitimacy of the decision”. Apple, in an interview with TechCrunch, stated: “Apples face intense competition in every operating market, and we remain committed to building the best products, services and user experience. The adoption of EU-style rules by the United Kingdom will weaken this effort, leading to a downgrading of user privacy security, delayed access to new functions and experience fragmentation. We have witnessed the impact of regulation on European Union apple users and urge the United Kingdom not to repeat that.”
Under the regulatory process, the CMA will develop a code of conduct for specific issues in the coming months, which may require substantive reforms such as the opening of third-party application shops and the removal of default browser bindings.
