Apple and Google may be compelled to alter their mobile platforms, following a finding by the UK’s competition watchdog that current regulations could be “limiting innovation and competition”.
The Competition and Markets Authority (CMA) highlighted the substantial and entrenched market power held by the two tech giants through their platforms.
Consequently, both companies have been designated with “strategic market status”, a classification reserved for the most dominant businesses.
The decision empowers the regulator to intervene, fostering greater competition that is expected to benefit both consumers and businesses.
Between 90 and 100 per cent of UK mobile devices run on Apple or Google’s mobile platforms, according to the CMA.
People are unlikely to switch between the two devices and will remain either an Apple or Android user, it found.
The CMA gained new powers at the beginning of the year to clamp down on players that it believes are dominating digital markets.
It launched investigations into Apple and Google’s mobile platforms, which incorporates their operating systems, including iOS and Android, app stores and browsers that appear on mobile phones.
Will Hayter, executive director for digital markets at the CMA, said: “Apple and Google’s mobile platforms are used by thousands of businesses right across the economy to market and sell products and services to millions of customers, but the platforms’ rules may be limiting innovation and competition.
“Having taken into account the feedback received since our proposed decision, we have today designated Apple and Google’s mobile platforms with strategic market status.”
Having strategic market status means a company has substantial and entrenched market power, and significant size, scale or influence in terms of their digital activity.
They must also have turnover of more than £1 billion in the UK or £25 billion globally.
A separate investigation into Google found that it had dominance over the market with its search engine services, including Chrome.
That decision, published earlier this month, marked the first time the CMA had used its new powers to designate a tech firm with the strategic market status.
Oliver Bethell, Google’s senior competition director, criticised the watchdog’s decision as “disappointing, disproportionate and unwarranted”.
“The UK’s new digital markets regime was introduced with the promise of being pro-growth and pro-innovation, with the CMA emphasising that its work would be highly targeted and proportionate,” he said.
“In this context, we simply do not see the rationale for today’s designation decision.”
There are 24,000 Android phone models from 1,300 phone manufacturers worldwide, “facing intense competition” from the iOS system in the UK, Mr Bethell said.
A spokeswoman for Apple said: “Apple faces fierce competition in every market where we operate and we work tirelessly to create the best products, services and user experience.
“The UK’s adoption of EU-style rules would undermine that, leaving users with weaker privacy and security, delayed access to new features, and a fragmented, less seamless experience.
“We’ve seen the impact of regulation on Apple users in the EU and we urge the UK not to follow the same path.”
