A recent investigation by the UK’s competition authority has found that the dominant position of Apple and Google in the mobile browser market is stifling innovation and potentially hindering economic growth. The findings, outlined in a 611-page report, suggest that the companies’ control over mobile browsers, which are the primary gateway for users to access the web on their mobile devices, has significant implications for both consumers and businesses.
The report highlights issues primarily related to Apple’s policies that govern how mobile browsers operate on its devices. One of the key concerns is Apple’s mandate requiring all third-party browsers on iOS to use its WebKit engine. This limits the ability of competitors to differentiate their browsers, thereby reducing innovation in the mobile browser space. The investigation also points out that Safari has early or exclusive access to key platform features, which hampers competition, especially in areas like privacy features and the development of Progressive Web Apps (PWAs).
For Google, the investigation focused on its revenue-sharing arrangement with Apple, where Google pays Apple a large portion of the revenue generated from web searches conducted via Safari and Chrome on iOS devices. This arrangement is seen as limiting the financial incentives for both companies to compete vigorously, thereby reducing potential innovation and consumer choice.
No Immediate Enforcement Action:– Despite these findings, there is no immediate competition enforcement action planned. The Competition and Markets Authority (CMA) has recommended waiting for the implementation of enhanced antitrust powers, which will be activated if it is confirmed that Apple and Google’s practices fall within the scope of the CMA’s special abuse control powers. These powers came into effect earlier this year, following a major reform of UK competition law targeted at digital giants. However, the CMA is still investigating whether Apple and Google meet the criteria for the new regulatory framework.
The report suggests that addressing the issues through standard market investigation powers may not be effective and that stronger, more targeted interventions might be necessary.
Cloud Gaming and Other Changes:-Cloud gaming, initially part of the investigation, was dropped last November after Apple made changes that the regulator believes could alleviate competition concerns in that area. The final report, which builds upon earlier conclusions from last fall, also notes that certain concerns about choice screen designs have been resolved, particularly after Apple updated iOS in December, allowing users to more easily switch their default browsers. However, issues regarding the ease of switching from Safari and Chrome to other mobile browsers remain a concern.
Potential Remedies and Future Actions
The report outlines several potential remedies to address the competition issues identified. These include:
- Requiring Apple to allow alternative browser engines.
- Mandating interoperability so that rival browsers have the same access to iOS features as Safari.
- Banning the revenue-sharing agreement between Apple and Google.
- Regulating the display of browser choice screens to encourage fairer competition.
While none of these remedies have been proposed for immediate enforcement, they serve as a possible roadmap for future regulatory action, especially if the CMA’s Digital Markets Unit determines that Apple and Google hold Strategic Market Status (SMS), which would subject them to the enhanced competition powers. The SMS investigation is expected to conclude later this year.
Industry Reactions:– In response to the findings, Apple stated that it believes in dynamic markets where innovation can flourish but expressed concerns that the proposed remedies could undermine privacy, security, and the overall user experience. Apple emphasized its commitment to user trust and indicated that it would engage constructively with the CMA to address their concerns.
Google has yet to issue a formal statement on the matter.
Next Steps
The CMA’s analysis will be critical in determining the next steps in regulating Apple and Google’s dominance in the mobile browser space. The competition watchdog’s investigation into whether these companies meet the criteria for Strategic Market Status is expected to provide further clarity later this year, which could lead to tailored remedies aimed at fostering greater competition and innovation in the mobile ecosystem.
In the meantime, businesses and consumers alike continue to feel the impact of the Apple-Google duopoly, which could limit opportunities for new features and hinder the overall digital economy in the UK and beyond.
