The UK’s Competition and Markets Authority (CMA) is challenging the dominance of Apple and Google in the mobile app market, describing their control as an “effective duopoly.” The regulator is proposing changes that could allow app developers to offer users alternative payment methods outside of the established app store systems. Currently, these tech giants impose restrictions that limit developers’ ability to direct customers to potentially cheaper or varied purchasing options, with Apple and Google charging commissions as high as 30% on certain in-app transactions.
By enabling what the CMA calls “steering,” developers would gain more autonomy, potentially fostering greater competition within the mobile app marketplace. Apple and Google’s platforms are currently the primary systems used by a vast majority of smartphone users in the UK, giving them substantial influence over the industry. Some companies, such as Spotify, have already taken steps to bypass app store fees by directing their customers to complete purchases through their websites instead.
The CMA believes that dismantling current barriers could introduce more choices for both consumers and businesses. Besides payment options, the regulator is also considering whether Apple should open up its near-field communication (NFC) technology, which could enable developers to create alternative contactless payment solutions for iPhones. This consideration forms part of the broader strategy to allow more innovation and competition in the app ecosystem.
However, Apple has raised concerns that such regulatory changes might compromise user safety, pointing out that existing systems provide important security features, privacy controls, and fraud prevention measures. Meanwhile, Google has indicated that it has already made some adjustments to permit developers to guide users towards external payment methods, suggesting a willingness to adapt to some of the CMA’s demands.
This initiative by the CMA comes after it designated Apple and Google as companies with strategic market status, granting the authority increased power to enforce specific business practice regulations. This move underscores the regulator’s commitment to ensuring a more competitive environment in the digital economy, particularly in sectors where market power is heavily concentrated among a few major players.