Saturday, June 25, 2022

Apple and Google have too much power over phones, Watchdog says

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Apple and Google have too much power over the phone market and action must be taken to prevent them from taking over more, the UK’s Competition and Markets Authority has said.

The watchdog is looking at ways to address the company’s “duopoly” as it fears the two companies could become even more dominant, he revealed when releasing a final report on the two companies after a year of research.

The CMA said the two companies have a “stranglehold” on the market that limits people’s choices, it said. It pointed out how they can use their ecosystems to promote their own services and crowd out other options.

In particular, it pointed to mobile browsers and cloud gaming as three ways it claimed the companies could use their dominance to unfairly exclude competitors.

Apple, for example, bans alternatives to its own browser engine on its phones, making it much harder for other apps to differentiate from the built-in Safari browser. And it has also blocked cloud gaming apps from the App Store, which the CMA says will prevent the sector from growing and means customers risk missing out on the technology’s full benefits.

The CMA also opened an investigation into Google’s Play Store and how it may set terms on how customers can make in-app purchases. A similar investigation into Apple’s practices is already underway, which began in March 2021.

It said some responses would require policy changes and identified them in its report. However, the CMA will look for more immediate ways to address the situation using the powers it already has, it said.

“When it comes to how people use cell phones, Apple and Google have all the cards in their hands,” said Andrea Coscelli, executive director of the CMA. “As good as many of their services and products are, their powerful impact on mobile ecosystems allows them to foreclose on competitors, hold back the UK tech sector and limit choice.

“We all rely on browsers to use the internet on our phones, and the engines that make them work have a huge impact on what we can see and do. Right now, choice in this space is severely limited, and that’s having a real impact – preventing innovation and reducing competition from web apps. We must give innovative technology companies, many of which are ambitious start-ups, a fair chance to compete.

“We have always known that while we await legislation for the new digital regime, we will maximize the use of our current tools. Today’s announcements – along with the eight lawsuits currently pending against big players in the tech industry, ranging from tackling fake reviews to problems in online advertising – are proof that this is in action.”

Apple said it “respectfully disagrees” with some of the report’s findings and hopes to convince the CMA that its approach is actually positive for customers.

“We believe in thriving and competitive markets where innovation can thrive. Through the Apple ecosystem, we’ve created a safe and trusted experience that users love and a great business opportunity for developers. In the UK alone, the iOS app economy supports hundreds of thousands of jobs and enables developers large and small to reach customers around the world. “We respectfully disagree with a number of the report’s conclusions that undermine our investments in innovation, privacy and user performance – all of which contribute to why users love iPhone and iPad and level the playing field for small developers on a trusted platform.” We will continue to work constructively with the Competition and Markets Authority to explain how our approach promotes competition and choice while ensuring consumer privacy and safety are always protected.”

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