The UK’s Competition and Markets Authority (CMA) is initiating measures to address what it terms an “effective duopoly” held by Apple and Google over mobile app platforms. The proposed changes aim to empower developers by allowing them to guide users towards alternative payment methods outside the app stores, potentially reducing the current reliance on these tech giants’ platforms.
According to the CMA, existing restrictions hinder competition by limiting app developers from offering cheaper or varied purchasing options to customers. Currently, Apple and Google can charge commissions of up to 30% on certain in-app transactions, a practice that the regulator believes stifles competition and innovation in the mobile app market. The regulator suggests that enabling developers to “steer” users to other payment options could enhance market dynamics, given that Apple and Google operate the main platforms used by most UK smartphone users.
Companies like Spotify have already circumvented app store payments to avoid commission fees, redirecting their customers to make purchases on their websites instead. The CMA believes that dismantling these barriers could broaden choices for businesses and consumers alike. In addition, the watchdog is contemplating whether Apple should allow broader access to its near-field communication (NFC) technology, which would enable developers to offer alternative contactless payment solutions on iPhones.
Apple has expressed concerns that such proposed changes might compromise user protections, including security features, privacy settings, and measures to guard against scams. Meanwhile, Google has indicated that it has already implemented some modifications to permit developers to guide users towards external payment avenues.
This move by the CMA comes on the heels of its decision to designate Apple and Google as holding strategic market status, a classification that grants the regulator increased power to enforce specific regulations on their business operations.