The UK’s competition watchdog says it intends to take action to break the control held over the mobile app market by Apple Inc (NASDAQ:AAPL) and Alphabet Inc's (NASDAQ:GOOG) Google.
After finding that both tech giants have "strategic market status" under the Digital Markets Act, the Competition and Markets Authority (CMA) said it proposed enforcing measures to spur competition.
The strategic market status means the companies have a disproportionate amount of control in the sector.
Proposals under the CMA's separate "roadmaps" for Apple and for Google are "targeted and proportionate" and represent a "proportionate, pro-innovation" approach, it said.
These actions include requiring Apple and Google allow app developers to direct their potential customers off the App Store and Play Store, that both companies review and rank apps in their stores "in a fair, objective and transparent manner", and that Apple would to "fairly and objectively consider requests from third parties for interoperable access to functionality in its operating systems".
Another key concern for Google relates to agreements it has with mobile device manufacturers, combined with its control over the Android operating system.
The competition watchdog launched its investigations into the pair's mobile platforms in January, saying each firm’s mobile operating systems, app stores and browsers would be probed to see if they required tailor-made regulation.
Today, the CMA said its research found that the 'app economy' generates around 1.5% of Britain’s GDP and supports around 400,000 jobs, but the level of control the two US tech behemoths have over how apps are hosted and downloaded risks restricting innovation for developers, with around 90-100% of UK mobile devices run on Apple or Google’s platforms.
This level of market dominance has led to concerns from developers, including inconsistent app review processes, app store search rankings that favour software owned by Apple or Google, restrictions on functionality and forcing app developers into accepting the hefty 30% commission on in-app purchases.
The CMA will investigate each of these issues further to determine how a fairer app store ecosystem can be established for UK developers.
"Apple and Google’s mobile platforms are both critical to the UK economy – playing an important role in all our lives, from banking and shopping to entertainment and education. But our investigation so far has identified opportunities for more innovation and choice,” said CMA chief executive Sarah Cardell.
"The targeted and proportionate actions we have set out today would enable UK app developers to remain at the forefront of global innovation while ensuring UK consumers receive a world-class experience.
"Time is of the essence: as competition agencies and courts globally take action in these markets, it’s essential the UK doesn’t fall behind.”