The UK’s Competition and Markets Authority (CMA) is set to challenge the dominance of Apple and Google over mobile app platforms, which it describes as an “effective duopoly.” This initiative includes proposals aimed at allowing app developers more freedom to direct users to alternative payment methods outside traditional app stores.
Currently, Apple and Google impose restrictions that limit competition by prohibiting app developers from offering different or cheaper payment options to their customers. In some cases, these tech giants charge commission fees up to 30% on in-app purchases. The CMA believes that by enabling developers to “steer” consumers towards other payment avenues, it could enhance competition and grant developers more autonomy in the mobile app ecosystem, where Apple and Google dominate among UK smartphone users.
Notably, companies like Spotify have already bypassed in-app payment systems to avoid these hefty commissions, opting instead to process payments directly through their websites. By removing such barriers, the CMA argues, more options could be available for both businesses and consumers, potentially leading to a more competitive and varied market.
In addition to payment options, the watchdog is evaluating whether Apple should be required to offer broader access to its near-field communication (NFC) technology. This change could enable developers to create alternative contactless payment solutions for iPhone users. Apple, in response, has expressed concerns that these proposed modifications might undermine user security, privacy controls, and protections against scams. Meanwhile, Google has noted that it has already made some adjustments, allowing developers to guide users to external payment choices.
This regulatory move follows the CMA’s decision to designate Apple and Google with strategic market status, which bestows the authority to enforce specific regulations on their business practices. This classification underscores the regulator’s increased power to mandate changes and foster a more competitive marketplace.