The UK’s Competition and Markets Authority (CMA) is moving to tackle what it views as an “effective duopoly” by Apple and Google in the realm of mobile app platforms. The regulator has proposed changes that would empower developers to guide users towards alternative payment methods outside of the app stores. These reforms aim to challenge the current setup, where developers are unable to present customers with potentially cheaper or varied purchasing options due to existing restrictions. Both Apple and Google currently impose commissions of up to 30% on certain in-app transactions, a practice the CMA believes stifles competition.
By enabling developers to “steer” customers to different payment avenues, the CMA hopes to enhance competition within the mobile app market. This market is predominantly controlled by Apple and Google, whose platforms are the go-to for most UK smartphone users. Companies like Spotify have already circumvented app store charges by redirecting users to their own websites to complete transactions, a move that could become more common if the CMA’s proposals are enacted. The regulator argues that such changes could expand choices for businesses and consumers alike.
In addition to payment options, the CMA is considering whether Apple should open its near-field communication technology, which would allow developers to create alternative contactless payment solutions for iPhones. This potential shift could diversify the payment landscape on Apple devices, providing developers with new tools to innovate and compete.
Apple has expressed concerns that these proposed measures might undermine user protections, including critical security features, privacy controls, and safeguards against scams. Meanwhile, Google has noted that it has already implemented certain changes that allow developers to direct users to external payment methods.
This initiative by the CMA comes on the heels of its decision to classify Apple and Google as possessing strategic market status. This classification grants the regulator enhanced power to enforce specific regulations on the business operations of these tech giants, marking a significant effort to curb their dominant position in the app market.