Unlocking greater competition in mobile ecosystems and the ever-growing scrutiny of Big Tech

13 July 2022

Mobile devices and in particular smartphones are ubiquitous and play a significant role in the daily lives of every citizen. They have become the most common way to access the internet and interact with an increasing number of connected devices, whilst supporting rapidly expanding ecosystems which are essential platforms to access a growing range of products and services.

The CMA is concerned that competition across mobile ecosystems is not working as well as it should.  This is the main conclusion emerging from the Final Report published last month by the CMA following its market study (the Report). 

In particular, the Report concludes that:

  • there is not enough competition between and within the Apple and Google ecosystems;
  • Apple and Google each hold significant market power and control the main gateways into their ecosystems, including operating systems, native app distribution, mobile browsers and browser engines. According to the Report, "Apple and Google's duopoly means that they have a stranglehold over these key gateways" and the CMA fears that they can leverage that market power into adjacent markets; 
  • there are multiple restrictions arising from Apple's and Google's control over their ecosystems which harm competition by making it more difficult for rivals, including emerging businesses, to compete, which in turn stifles innovation and reduces consumer choice; and
  • these restrictions go beyond what is necessary to protect privacy, security or online safety. The Report makes it clear that before accepting any restrictions the CMA will carefully examine if less restrictive means of protection are available. Where necessary, it will seek independent expert advice (as the CMA did in this case in order to evaluate the security concerns that were expressed by Apple in particular). A proper balance must be struck between privacy, security and online safety and the preservation of effective competition. This will be a battleground which the CMA may have to enter again and again as it continues to take enforcement action in digital markets. In exploring what measures could unlock more competition in mobile ecosystems, the Report provides an insight into how the CMA may seek to resolve some of the difficult questions which lie at the heart of the interface between competition policy and privacy, security and online safety concerns. 

The Report highlights the importance which the CMA continues to attach to the protection of competition in digital markets. In December 2020, at the time of its interim report, the CMA’s preference was to hold off taking immediate action and await the coming into force of the Digital Markets, Competition and Consumer Bill which was due to give the CMA’s Digital Markets Unit (DMU) the statutory footing to oversee a new regulatory regime intended to apply to powerful technology firms. The DMU could designate firms that have “strategic market status” in order to manage the market power of those firms through conduct requirements. The DMU would also have the power to tackle the sources of that market power through so-called “pro-competitive interventions”, which could, for example, be used to remove or reduce specific barriers to entry in digital markets.

However, contrary to the CMA’s expectations, the legislation to underpin the new regulatory regime and empower the DMU was not included in this year’s Queen’s Speech. While the Government has committed to legislate during the course of this Parliamentary session, it is not clear when the legislation will be put before Parliament and the new regime will come into force. Once in force, the DMU would also need to formally designate firms that have strategic market status before it can intervene in their conduct, a process which in itself could take 9 to 12 months.

In its Interim Report on Mobile Ecosystems, the CMA accordingly noted that it may: "…revisit our present decision not to make a reference if the legislation required to bring the proposed new regime into force is not laid before Parliament for some time…such that it no longer appears to us that action by the DMU represents the most effective and timely means of addressing the issues we have identified." While the issues it has identified may be best addressed through the powers that will be vested in the DMU when the proposed new regulatory regime comes into force, the CMA considers that it cannot afford to wait. 

The CMA is therefore consulting on the launch of a market investigation into the supply of mobile browsers and mobile browser engines, and the distribution of cloud gaming services through app stores on mobile devices. It considers that these are areas of largely untapped opportunities where there are a number of restrictions which potentially harm competition and innovation. The consultation is set to close on 22 July and a final decision on whether to proceed with a market investigation will then be taken by the CMA’s Board.1

In addition to consulting on the launch of a market investigation, the CMA has also decided to open a new investigation into Google’s Play Store and the rules for in app-payments which oblige app developers to use Google’s own payment system for in-app purchases. This comes on top of the CMA’s ongoing investigation into Apple’s App Store rules for in-app payments as well as a number of other investigations currently ongoing in relation to digital platforms -- a string of cases which is set to continue to grow given the CMA’s stated intention to launch further cases in the digital sector. Since publishing the Report, it is also noteworthy that the CMA has opened an investigation into Amazon’s Market Place which is the first time that it has investigated Amazon’s conduct directly.

In parallel, the CMA continues to push the government to legislate to obtain the tools it believes it needs to tackle the competition issues which exist and continue to arise in digital markets. In the Report, the CMA accordingly emphasises that “[a] new ex ante approach is required to oversee powerful tech firms like these [Apple and Google] and support the UK’s innovative tech sector”. This message was reiterated recently by Andrea Coscelli (due to step down as Chief Executive of the CMA later this month), who in an interview with the Financial Times cautioned that the delay in implementing legislation could harm the UK’s ability to develop its own regulatory regime and shape the conduct of digital platforms. This is because the EU is moving ahead with its own plans and expects to adopt its Digital Markets Act in the autumn of this year, legislation which on its entry into force will give the European Commission extensive powers to regulate the conduct of the most powerful digital firms. 

What does seem certain is that the scrutiny of Big Tech, both in the UK and elsewhere, is only going to increase and will bring many, often highly complex challenges for regulators. While this is likely to lead to growing calls for closer coordination amongst regulators, it remains to be seen if these calls will be heeded and the extent to which a coherent approach to remedies and regulatory interventions can and will emerge across different jurisdictions. This will be important for global digital platforms where the implementation of remedies or conduct requirements imposed in one jurisdiction may result in changes to how a business operates in other jurisdictions. Meanwhile, however, firms at the receiving end of increased antitrust and regulatory scrutiny and market participants which may benefit from such scrutiny will need to adjust to an environment in which they are likely to face competing regulatory demands and opportunities.


1 A market investigation is a unique feature of the UK competition law regime. It gives the CMA broad powers to undertake a detailed industry review and impose far-reaching remedies if there are features of a market that have an adverse effect on competition. Importantly, these remedies can be imposed without any prior finding that competition law has been infringed. They include structural remedies requiring companies to separate or sell parts of their business, as well as recommendations to government if legislation is required, and behavioural regulation, for example governing the way products or services are sold in the market.