UK competition watchdog investigates Apple and Google 'stranglehold' over the mobile market
- Reference: 1669185014
- News link: https://www.theregister.co.uk/2022/11/23/cma_apple_google_investigation/
- Source link:
The CMA in June concluded a year-long study of the market for mobile software, hardware, and services. Based on [1]its findings – that Apple and Google have "a stranglehold over operating systems, app stores and web browsers on mobile devices" – the UK competition watchdog said at the time that it intended to escalate by opening a formal investigation.
That inquiry has now begun and it should conclude in no more than 18 months. At that point, the CMA may choose to impose remedies, such as demanding a change in the way certain products are sold, requiring the divestment of business units, or insisting upon the removal of anti-competitive restrictions.
[2]
"Many UK businesses and web developers tell us they feel that they are being held back by restrictions set by Apple and Google," said Sarah Cardell, interim Chief Executive of the CMA, in [3]a statement . "When the new Digital Markets regime is in place, it’s likely to address these sorts of issues."
[4]
[5]
"In the meantime, we are using our existing powers to tackle problems where we can. We plan to investigate whether the concerns we have heard are justified and, if so, identify steps to improve competition and innovation in these sectors."
Separately, the CMA is looking into [6]Google's ad business and its [7]Chrome "Privacy Sandbox" initiative , while another UK agency, Ofcom, is looking into how Amazon, Microsoft and Google affect [8]competition in the cloud service business .
[9]
The CMA in this instance is focused on Apple's and Google's control over operating systems, app stores, and web browsers on mobile devices. The watchdog says, "97 percent of all mobile web browsing in the UK in 2021 happens on browsers powered by either Apple's or Google's browser engine," which makes restrictions related to browser engines significant in the context of competition.
The agency also observes that the 800,000 users of cloud gaming services in the UK are affected by restrictions that Apple and Google place on mobile cloud gaming services.
[10]Meta gives up fight to get $400m Giphy buy approved
[11]UK regulator proposes price cap on Motorola as supplier of Airwave network
[12]Microsoft, Activision Blizzard have days to show merger won't harm competition
[13]Court OKs billion-dollar Play Store gouging suit against Google
One of the main focuses of the CMA investigation is on Apple's requirement that all mobile browsers on iOS devices use its own WebKit rendering engine rather than competing browser engines like Google's Blink (the basis of Chrome) or Mozilla's Gecko (the basis of Firefox).
"Web developers have complained that Apple’s restrictions, combined with suggested underinvestment in its browser technology, lead to added costs and frustration as they have to deal with bugs and glitches when building web pages, and have no choice but to create bespoke mobile apps when a website might be sufficient," the CMA said.
The CMA's [14]market investigation reference [PDF] also says the agency will look at the use of in-app browsers – [15]pseudo-browsers implemented within native apps that aren't subject to the same limitations as stand-alone browsers.
Rivals and investigators line up
In response to the CMA's consultation process, various companies that compete with Apple and Google, advocacy groups, and individual developers voiced their concerns about Apple's and Google's practices in [16]comments submitted in June that have just been published.
Microsoft [17]endorsed [PDF] the CMAs findings and specifically expressed support for "removing Apple’s restrictions on competing browser engines on iOS devices, mandating access to certain functionality for browsers (including supporting web apps), requiring Apple and Google to provide equal access to functionality through APIs for rival browsers, requirements making it more straightforward for users to change the default browser in their device settings, and offering choice screens to overcome the distortive effects of pre-installation."
[18]
Mozilla likewise [19]expressed support [PDF] for the CMA's conclusions about the problems arising from Apple's iOS WebKit restriction and urged the CMA to extend its scrutiny to Chrome's desktop dominance. Meta meanwhile asked the CMA to expand the scope of its inquiry to cover Apple's App Tracking Transparency (ATT) privacy settings, which [20]interfere with business models based on ad revenue [PDF].
The Electronic Frontier Foundation [21]observed [PDF], "Apple has a history of invoking security as a procompetitive rationale for its policies, when many of the company’s practices are, in fact, anticompetitive."
The advocacy organization said it has historically counseled that the answer to restrictive apps stores is competing app stores but it now contends that's not possible given the market power of Apple and Google.
The EFF wrote, "[T]he dominant mobile platform vendors have woven together a thicket of legal doctrines – including anti-circumvention elements of copyright law, software patent, trade secret, badly drafted cybersecurity laws, onerous contract terms, and exotic tortious interference theories at common law – that create unbearable legal risks for anyone who would offer device owners alternative app stores."
Open Web Advocacy, a developer rights group, provided [22]70 pages of analysis [PDF] that cites Apple's financial interest in maintaining the primacy of native iOS apps (which may generate gatekeeper revenue) over web apps (which can't be controlled through App Store rules).
"By requiring all browsers on iOS to use the WebKit browser engine, Apple is able to exert control over the maximum functionality of all browsers on iOS and, as a consequence, hold up the development and use of web apps," the group said. "This limits the competitive constraint that web apps pose on native apps, which in turn protects and benefits Apple’s App Store revenues."
Various web developers weighed in with comments objecting to Apple's and Google's practices. Among these, an individual identified as Mike Padgett offered perhaps the most uninhibited take on the situation.
Padgett [23]wrote [PDF], "It's insane that I even have to write this email.... somebody please stop Apple from waving their dick around with this ridiculous monopolistic BS concerning the trash ass Safari kit on iOS."
"There is literally no reason for Apple to maintain this stance, other than pure anti‐competitive greed."
The Register asked Apple and Google to comment but neither responded.
Both companies however submitted lengthy defenses of their practices earlier this year in response to the CMA's consultation process.
Google in its [24]comments [PDF] said it welcomes the CMA's investigation where there are real competition issues – Apple's iOS rules rather than Android where there's "scant evidence" of adverse effects on competition.
Apple meanwhile took a less conciliatory tone and rejected the CMA's findings as flawed.
"Apple considers that a balanced review of the evidence would lead to the conclusion that competition with respect to both mobile browsers and cloud gaming is robust and that, in particular, Apple’s approach provides users with a valuable choice, centered on security, privacy and performance, between ecosystems," the company [25]said [PDF] through its law firm Gibson Dunn.
As if to underscore the EFF's observation about Apple's use of security as a justification for the status quo, Apple's 15-page submission includes 61 mentions of the word "security." ®
Get our [26]Tech Resources
[1] https://www.theregister.com/2022/06/12/uk_competition_watchdog/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y339TnnLRZz3acZ7i2tFQAAAAQ8&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.gov.uk/government/news/investigation-into-cloud-gaming-and-browsers-to-support-uk-tech-and-consumers
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y339TnnLRZz3acZ7i2tFQAAAAQ8&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y339TnnLRZz3acZ7i2tFQAAAAQ8&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2022/05/27/cma_google_ad_dominance/
[7] https://www.theregister.com/2022/05/19/google_privacy_sandbox_progress/
[8] https://www.theregister.com/2022/09/22/hyperscale_cloud_probe_uk/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y339TnnLRZz3acZ7i2tFQAAAAQ8&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2022/10/18/meta_facebook_giphy_cma_/
[11] https://www.theregister.com/2022/10/17/cma_motorola_airwave/
[12] https://www.theregister.com/2022/09/02/microsoft_activision_blizzard_cma/
[13] https://www.theregister.com/2022/07/20/uk_court_okays_google_lawsuit/
[14] https://assets.publishing.service.gov.uk/media/637b65c0d3bf7f7208f6c709/reference_decision__1_.pdf
[15] https://www.theregister.com/2022/10/04/metas_facebook_webview_chromium/
[16] https://www.gov.uk/government/consultations/mobile-browsers-and-cloud-gaming-proposal-to-make-a-market-reference
[17] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1118229/Microsoft_-_Consultation_responses_-_Publication_version.pdf
[18] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y339TnnLRZz3acZ7i2tFQAAAAQ8&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[19] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1118236/Mozilla_-_Consultation_response_-_Publication_version.pdf
[20] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1118227/Meta_-_Consultation_response_-_Publication_version.pdf
[21] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1118217/EFF_-_Consultation_response_-_Publication_version.pdf
[22] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1118238/Open_Web_Advocacy_-_Consultation_response_-_Publication_version.pdf
[23] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1118231/Mike_Padgett_-_Consultation_response_-_Publication_version.pdf
[24] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1118219/Google_-_Consultation_response_-_Publication_version.pdf
[25] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1118145/Apple_-_Consultation_response_-_Publication_version.pdf
[26] https://whitepapers.theregister.com/
Re: "Its study found"?
What happened to Huawei ?
Oh yeah, shot down by British Go Vermin after a knee jerk reaction from over the pond..............
Were you asleep ?
ALF
"Apple’s approach provides users with a valuable choice, centered on security, privacy and performance, between ecosystems"
Ah, "between ecosystems". Our way or the highway, basically.
So Apple admits they are a duopoly.
Good to know they agree with the regulator.
Now, are the CMA actually going to do anything?
Pot, meet kettle
> Microsoft endorsed ... "requiring Apple and Google to provide equal access to functionality through APIs"
That's a bit rich isn't it?
At last!
With the CMA on the case, I'm sure their reign of terror will come to a swift end!
...And pigs will fly!
Shortsighted oversight :/
I read this report at the time - the whole construct is built on the myopic misconception that there is only Apple and Android.
Often not having the skills to differentiate between products; people buy what's popular, and so (as often happens) we've ended up with two systems with market domination. But there have been, and there are, other players: Windowsphone and Linuxphone (with various OSs).
It's rather hypocritical for a government to put its faith in big business, and then stomp up and down like a petulant child when it doesn't like what big business does. Or perhaps there's some regret in the decision, having seen the outcome?
A more fruitful way forward might be for the government to promote, and dare I suggest invest, in Linuxphone.
Re: Shortsighted oversight :/
People will buy what is popular which is true. But with the mobile apps market if there are two main platforms to support (Android and iOS) then the application developers will develop for both platforms (assuming they want to be present on both).
If you had say 5 or 6 mobile systems, would the developers want to spend equal time writing and improving apps for all these systems. This could mean if you bought a Wibble smartphone, you can't run your favourite game or access your bank details because the app developer doesn't think developing an app for a 10000 user base is worth it. This is what happened with the windows phone and blackberry they failed to move with the market and the users moved away to the point where the systems fell into disuse.
If you look at the desktop market then the main players are Microsoft and Apple - apple has a less than 20% market share and Microsoft takes most of the rest (Linux is still very low usage amongst normal users) so developers will mostly write code for these two platforms.
I use the Affinity product range, and they write for Windows and Mac but they don't develop for Linux because the market isn't there for it.
Re: Shortsighted oversight :/
Point of order, guv.
You point stands, but it's not if there are 10,000 users. But are those 10,000 users going to pay? I recall a study that suggested that the Apple ecosystem is so powerfull it generates money, a lot/enormous/huge $$$$ for Apple, but also there is still some for devs and other members of the eco system. If it's Andriod, well, all the money stays with Google. Handset manufacturers make pennies and devs, not a brass razoo.
Andriod handsets are cheaper, simply because there are so many more manufacturers competing. But cheap attracts cheap. Very few users pay for the apps. So, the major revenue stream is ads. And who sells the ads on the platform? (Clue, starts with a G).
Apple, well, if you're not poor (hackers aside), you don't buy Andriod, you buy Apple. And it's priced accordingly. Slightly (trivially?) more people pay for apps in the eco system, but it's 99% ads all the way.
1 billion users doesn't mean anything if there isn't a revenue stream attached.
Re: Shortsighted oversight :/
As Mozilla and UBPorts have both demonstrated, the vast majority of the "Million apps in the app store" are basically wraps around company's websites.
And contrary to Apple's felonious ring-fencing construct (which Google then used to defend themselves against Windowsphone), most people use a relatively small number of apps across all their platforms : they just like to use the apps they like to use.
Apps isn't really an argument, though it is true that some apps - e.g. WhatsApp - seem to hold a strange force over people. Sadly.
"Its study found"?
I hope they didn't spend a lot on that study, it is pretty obvious to anyone with eyes or who can read market share information.
It is far too late to do anything about it though, there's no chance a third competitor springs up and becomes viable no matter how much they try to hamstring Apple and Google.