Apple & Google have unfair 'vice-like grip' on smartphone markets, says UK regulator
Apple and Google are using their market power to create domineering self-contained ecosystems, according to a UK regulator, enabling the tech giants to have a "vice-like grip" over mobile devices that limits competition.
In an interim report on its probe into whether Apple and Google operate a duopoly in the smartphone market with their control over the App Store and Google Play store, the UK's Competition and Markets Authority (CMA) offers concern that consumers are missing out. The report, published on Tuesday, frames the market as being heavily controlled by the two tech giants, to the detriment of end users.
Since mobile users are buying either an iPhone or an Android device, they are entering each company's respective ecosystem, the CMA reckons. This gives Apple and Google control over what is offered to users, and enables them to "tilt the playing field towards their own services."
As examples, CMA refers to Apple's prevention of other app stores from existing on its devices, as well as Google's preinstallation of Chrome and Google Play on most Android hardware.
According to CMA, this leads to "less competition and meaningful choice for customers," who are "missing out o the full benefit of innovative new products and services." There is also the concern users face being charged higher prices than there would be in a more competitive market.
"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," said CMA Chief Executive Andrea Coscelli.
Most people know that Apple and Google are the main players when it comes to choosing a phone. But it can be easy to forget that they set all the rules too - from determining which apps are available on their app stores, to making it difficult for us to switch to alternative browsers on our phones," Coscelli continued.
She added that such control can "limit innovation and choice, and lead to higher prices."
The report offers suggestions for the kind of actions Apple and Google could take to remedy the situation, such as making it easier for users to switch devices without losing data, to allow alternative ways to install apps and the use of "web apps," providing more options for in-app purchases other than the App Store's mechanism, and to offer more default app choices.
Apple commented to Reuters that its ecosystems provide consumers security and privacy, enabling the sale of goods and job creation. "Apple believes in thriving and dynamic markets where innovation can flourish," Apple said.
Google did not provide an immediate comment on the report.
So far, the report indicates Apple and Google meets criteria for a "Strategic Market Status" designation under proposals to make digital markets more competitive in nature. If the proposals become law, the Digital Markets Unit will be created within the CMA to assign such a designation.
SMS companies would then face legally enforceable codes of conduct surrounding their behavior, aimed at preventing future exploitation of dominant positions.
The CMA is continuing to investigate the App Store and Google Play over competition concerns, and is welcoming responses on its initial filings until February 7, 2022. A final report is anticipated by June 2022.
In an interim report on its probe into whether Apple and Google operate a duopoly in the smartphone market with their control over the App Store and Google Play store, the UK's Competition and Markets Authority (CMA) offers concern that consumers are missing out. The report, published on Tuesday, frames the market as being heavily controlled by the two tech giants, to the detriment of end users.
Since mobile users are buying either an iPhone or an Android device, they are entering each company's respective ecosystem, the CMA reckons. This gives Apple and Google control over what is offered to users, and enables them to "tilt the playing field towards their own services."
As examples, CMA refers to Apple's prevention of other app stores from existing on its devices, as well as Google's preinstallation of Chrome and Google Play on most Android hardware.
According to CMA, this leads to "less competition and meaningful choice for customers," who are "missing out o the full benefit of innovative new products and services." There is also the concern users face being charged higher prices than there would be in a more competitive market.
"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," said CMA Chief Executive Andrea Coscelli.
Most people know that Apple and Google are the main players when it comes to choosing a phone. But it can be easy to forget that they set all the rules too - from determining which apps are available on their app stores, to making it difficult for us to switch to alternative browsers on our phones," Coscelli continued.
She added that such control can "limit innovation and choice, and lead to higher prices."
The report offers suggestions for the kind of actions Apple and Google could take to remedy the situation, such as making it easier for users to switch devices without losing data, to allow alternative ways to install apps and the use of "web apps," providing more options for in-app purchases other than the App Store's mechanism, and to offer more default app choices.
Apple commented to Reuters that its ecosystems provide consumers security and privacy, enabling the sale of goods and job creation. "Apple believes in thriving and dynamic markets where innovation can flourish," Apple said.
Google did not provide an immediate comment on the report.
So far, the report indicates Apple and Google meets criteria for a "Strategic Market Status" designation under proposals to make digital markets more competitive in nature. If the proposals become law, the Digital Markets Unit will be created within the CMA to assign such a designation.
SMS companies would then face legally enforceable codes of conduct surrounding their behavior, aimed at preventing future exploitation of dominant positions.
The CMA is continuing to investigate the App Store and Google Play over competition concerns, and is welcoming responses on its initial filings until February 7, 2022. A final report is anticipated by June 2022.
Mobile Ecosystems Interim R... by Mike Wuerthele
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Comments
They know tech and had a more than decent OS, and they failed.
If Microsoft and Nokia together can not manage to be a competitor who can?
Forcing Apple and Google to make their products worse is going to make competition happen?
The reviews I read of the Windows phone OS were generally positive but developers never really got on board, despite the fact that Microsoft paid them. After Apple opened up iOS to developers the App Store quickly became more important than the phone itself. Ultimately this was a big part of the demise of Windows Phone. Apple didn't cause this - consumers did.
As much as people here like to rag on Android, having a strong, viable alternative is good for both platforms. As good as iOS is, there have been many good ideas that came from Android and I can confidently say that Android competition has spurred Apple to develop and improve iOS/iPadOS.
Ultimately, with things like smartphones, within reason I think a duopoly is better - there's still competition, but the limited number of platforms mean developers are not spread too thin trying to create and support apps for 10 different systems. If you look at the number of apps available on the App Store, it's hard to argue that there's no competition.
Government in general loves to make things up like the above statement. It's good politics, or so they figure. In reality, there is much more competition and lower prices than ever before. We're talking about software here, not hardware. And the smartphone software ("app") market features unbelievable consumer choice and very low prices. This was not the case pre-iPhone. Think about the software you used to buy for your Mac or PC. You pretty much bought major software on disc...in a box. Many titles were $30-$60. Shareware and freeware were a crapshoot. You'd have to buy "upgrades" every year or so. OSX used to cost $129.
Now, when it comes to favoring their own apps unfairly, applying standards inconsistently or preventing third party payments entirely, those are other matters. But punishing Apple and Google for being the dominant players in the market won't make anything better for consumers. "Missing out on the full benefit of innovative new products..." LOL.
History reveals that partnering with Microsoft is like accepting a dinner invitation from Hannibal Lecter. One might as well just roll in seasonings and jump in the oven.
- Daniel Eran Dilger
http://roughlydrafted.com/RD/RDM.Tech.Q1.07/5F0C866C-6DDF-4A9A-9515-531B0CA0C29C.html
The reality is that public officials are chasing concerns that the public largely does not share.
The same is true of Senator Amy Klobuchar concerns about App Store fairness. What are most of us concerned about?
The safety of children online due to bullying, social media effects, sexual predation etc etc
The safety of the elderly due to cyber crime
The proliferation of misinformation, siloing, social tribalism etc etc
The hacking and leaking of personal information from corporate databases
And add your own here…
But officials just can’t seem to stop thinking about a so-called duopoly that has been surprisingly effective in giving us choice, rapid technological improvement, a proliferation of affordable apps etc etc.
I think they need to spend less time on their phones. They seem to be out of touch.
The whole report is blissfully ignorant of how the software development community actually works.
So you'd agree then that forcing 2001's Microsoft to unbundle Internet Explorer from Windows made Windows worse and competition less?
Back then, EVERYONE thought that either CE or Mobile would ultimately succeed. Because of this, when Andy Rubin tried to attract investors for Android, he had no takers for a platform that everyone thought that Microsoft was going to crush anyway. So then Rubin tried to sell Android to mobile device manufacturers that didn't have their own OS, including HTC and Samsung. HTC was making Windows Mobile smartphones and Samsung was making Windows CE ones, so both turned Rubin down. This allowed Google to buy Android - which was near financial collapse - for a pittance: unable to attract investors and no one else wanted them. Google had spent some time studying Microsoft's business model with CE and Mobile, and created one for Android designed to exploit its weaknesses: providing it to OEMs for free instead of licensing it, and allowing OEMs to modify it in order to differentiate it and promote their own software and services. Both HTC and Samsung switched from Microsoft to Android immediately and others followed suit shortly after.
This sort of thing is what people who call Android and iOS a duopoly are overlooking. Neither Apple or Google used unfair tactics to get where they were. They couldn't. At the time, Apple had 4% PC market share and their most popular product was the iPod. They weren't even able to initially launch the iPhone on more than one US carrier. Google meanwhile didn't even have the capability to manufacture and market a product. They had to rely on third parties, who screwed Google over every chance they got. Android and iOS succeeded against - at the time - much bigger and more entrenched competition by offering a clearly better product (Apple) and having a much better business plan - for example the open source based on Java and Linux helped Google attract the indie developers that Microsoft, Nokia and the rest on proprietary platforms couldn't - and were also able to ultimately develop a better product (Google).
Even for the folks who point out that Google bundled Gmail and YouTube: have we forgotten that Microsoft released Hotmail years before Google released Gmail? Again, Google made a better product. Also, everyone - Google, Microsoft, Yahoo - initially tried to compete with YouTube with their own service. Google was merely the first to admit that it wasn't working and throw in the towel and buy YouTube, which Microsoft (and Yahoo) could have done first but were too arrogant to admit that they were beaten by an upstart. I really don't see why governments should step in and punish Apple and Google for their success or reward Microsoft and Amazon - whom lets face it any action against Google and Apple will inevitably benefit because no one else has the resources to compete at this point - for their failures (remember Amazon's ridiculous phone)?
They could have sold their phones into the corporate world as they were pretty good but they were far too late to the market. After the first year, they seemed to lose faith in their product. After that, it was all downhill.
That said, legislators should recognize that smartphones hold very private, personal, and valuable information and thus require a much higher level of security than desktops. They should not do anything that compromises security and privacy. The number one thing they should never do is to force the platforms to allow side loading and alternative app stores. Governments that do this will face a deluge of complaints from iOS users. The security and privacy environment would markedly deteriorate if they allow this. Phishers and scammers will have a vast new ocean to fish in and the increased vigilance that will be needed to confront this added threat will be a great nuisance and cost for users.
Google's action here should have been illegal and an anti-trust case should have been brought up against them. Mind that Android is licensed, but the licensing fee comes at varying levels of free.
Google used its monopolistic dominance in search, used those profits to fund and develop Android, then they licensed it for free, re-enforcing their dominance in search and gained dominance in another market. It destroyed the smartphone operating system market just for search clicks. [All the paid-through-ads business models turns everything to shit. Google was at the forefront of it, but social media turned it up to 11.] This very action destroyed every smartphone OS competitor save for Apple, who arguably only survived by being the first mover and continuing to have the best phones which is quite difficult to do. Symbian and Windows Mobile really couldn't compete. I suppose MS could have competed by making WM open source and free, but Ballmer was an MS original, who wanted to be paid for use of their software. Nokia simply didn't have the money to fund Symbian as their oil well was burning. So, Symbian sank. Well, hiring an MS hack as CEO was a really bad call too. webOS and Blackberry were suffering for money and were also suffering from bad management.
And yes, the "duopoly" claims are stupid. There's nothing stopping a company from taking Android AOSP, modifying it for their ends, and selling smartphones with it. Amazon does it using the loose change from the couches of their e-book reader side business. There is nothing stopping the UK or the EU from providing some grants and tax breaks for companies to make "native" smartphones. All the pieces are there: Android AOSP and an entire supply chain. They need some designers, developers, businessfolks, and a distribution channel. There's going to be a lot of carriers and operators who would love a more custom set of phones. Provide some incentives.