Britain’s competition watchdog is considering changes to Apple and Google’s rules on payments to make their mobile platforms less costly for app developers and help bring down prices for consumers.
The Competition and Markets Authority (CMA) is consulting on forcing Apple and Google to allow developers to steer their customers away from the tech giants’ platforms for payment.
Currently this is banned by Apple and restricted by Google in the UK, which means developers end up paying mandatory fees set by the platforms, according to the CMA.
The CMA is proposing measures to allow “steering” and ensure fees charged by Apple and Google for this are “fair and reasonable”.
The regulator said: “The CMA would expect steering fees to be lower than current app store charges, with savings passed on to UK customers or invested back into the developers’ businesses to support future innovation.”
The move follows the CMA’s move last October to give Apple and Google “strategic market status” for their dominance in the mobile market, which is designated to the largest and most powerful businesses.
The decision means the regulator can choose to intervene to open them up to more competition that it says will benefit consumers and businesses.
Speaking on Tuesday at the Informa Connect CompLaw conference, the CMA’s executive director for digital markets, Will Hayter, will say: “We are consulting today on draft conduct requirements to support so-called ‘steering’, or the ability for app developers to engage directly with their users outside Apple and Google’s app stores.
“We think it is important to give both app developers and users more choice about how they communicate and how they transact.
“This is not only because choice is inherently valuable but also because we see this as the best way to introduce some competitive pressure in a vital part of the mobile ecosystem that is otherwise sorely lacking such pressure.”
Google insisted it already allows “steering” for developers and changes to fees after unveiling the changes last week, though this is still “subject to certain restrictions”.
The tech giant said: “We have already made the changes that the CMA is proposing today.”
Apple raised concerns that the CMA’s “steering” plans would “open the door to scams”.
An Apple spokesperson said: “Through the App Store, we strive to ensure that apps are safe, transactions are secure and users are protected.
“Steering requirements undermine that foundation, opening the door to scams, bait-and-switch tactics and the circumvention of parental controls.
“When users are directed away from Apple’s trusted payment infrastructure, they lose the protections they rely on Apple to provide.”
The CMA is also looking at further changes to unblock restrictions on Apple’s platform to allow UK fintechs and developers to support contactless transactions, such as card-based payments through digital wallets, from within their own iOS apps.
It is understood Apple already allows authorised developers to offer near field communication (NFC) contactless transactions using the secure element from within their own apps on iPhone, which is separate from Apple Pay and Apple Wallet.
The CMA has now has concluded three strategic market status investigations and launched a fourth into Microsoft’s business software ecosystem since the UK’s digital markets competition regime started 18 months ago.
Mr Hayter will add later in his speech on Tuesday: “In many cases, the market takes enough care of both companies and people – such is the power of competition to give people a choice of innovative products and services at reasonable prices, and to give companies with great ideas the chance to succeed.
“But sometimes that simply doesn’t work in practice. If companies don’t do right by consumers, we may have to step in.”
