Apple and Google hold 'vice-like' grip on consumers, UK regulator warns about duopoly

• CMA is looking into making it easier for users to switch between iOS and  Android phones without losing functionality or data

• The British agency expects to issue a final report by June 2022

UK competition regulator on Tuesday said Alphabet Inc’s Google and Apple Inc hold a “vice-like” grip over how consumers use mobile phones, and users are losing out because of the companies’ “duopoly.”

The Competition and Markets Authority (CMA) said it “provisionally found that Apple and Google have been able to leverage their market power to create largely self-contained ecosystems.”

The statement comes as a new warning to Big Techs after the British government stepped up scrutiny of the influence these companies exercise in an internet-connected world.

“Apple and Google have developed a vice-like grip over how we use mobile phones, and we’re concerned that it’s causing millions of people across the UK to lose out,” CMA Chief Executive Andrea Coscelli said in the statement.

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The regulator on Tuesday said it would consult on its initial findings on Apple and Google and would welcome responses by February 7.

The British agency expects to issue a final report by June 2022.

The report set out a range of options that could be taken to address the market duopoly in the mobile operating system market, including making it easier for users to switch between Apple’s iOS and Google’s Android phones without losing functionality or data.

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It also looks at whether users could install apps through methods other than Apple’s App Store or Google’s Play Store and give users a choice for in-app payment, rather than being tied to the default payment systems.

Apple and Google’s response

In response to CMA’s study, Apple said the company “believes in thriving and dynamic markets where innovation can flourish.”

The Cupertino giant faces “intense competition in every segment,” Apple spokesperson said. “Our North Star is always the trust of our users. We will continue to create new opportunities for developers while protecting our user’s privacy and security.”

The iPhone maker also claimed the iOS App Economy in the UK supports more than 330,000 jobs.

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Google spokesperson said, “Android provides people with more choice than any other mobile platform in deciding which apps and app stores they use.”

The Android app ecosystem also supports nearly a quarter of a million jobs across thousands of app developer and phone maker businesses in the UK.”

It said the Android ecosystem supports almost a quarter of a million jobs in the UK, and as a result of recent changes, 99% of developers qualified for a service fee of 15% or less.

“We’re committed to building thriving, open platforms that empower consumers and help developers succeed,” it said.

‘Pro competition regime’

UK’s Tech and Digital Economy Minister, Chris Philp, said Britain’s “new pro-competition regime” would level the playing field between tech giants and smaller businesses.

On Monday, CMA said it would look into Microsoft’s $19.7 billion acquisition of artificial intelligence and speech-to-text firm Nuance Communications.

The regulator last month told Facebook owner Meta Platforms Inc to sell Giphy, the popular animated images platform it bought in 2020.

Picture Credit: PhoneArena