UK to investigate Apple and Google's 'effective duopoly'

AppleInsider · June 15, 2021 11:17AM

The UK's Competition and Markets Authority (CMA) has announced that it will examine if Apple and Google constitute a duopoly on mobile devices given their control over app stores.

Westminster

Alongside its existing examination of Apple over the App Store, the CMA has begun investigating whether the dominant iOS and Android platforms represent unfair competition.

"Apple and Google control the major gateways through which people download apps or browse the web on their mobiles - whether they want to shop, play games, stream music or watch TV," said Andrea Coscelli, CMA Chief Executive, in a Government statement.

"We're looking into whether this could be creating problems for consumers and the businesses that want to reach people through their phones," he continued.

Referring to the existing App Store investigation, he added that the CMA had "already uncovered some worrying trends," and that, "consumers and businesses could be harmed if they go unchecked."

This new study would in theory have come under the aegis of the UK's newly formed Big Tech regulator. However, the Digital Markets Unit will have no authority until new legislation empowers it in 2022.

"[We're] pressing on with launching this study now, while we are setting up the new Digital Markets Unit," added Coscelli, "so we can hit the ground running by using the results of this work to shape future plans."

The CMA is calling for users or businesses to contribute to its study, and emphasizes that it is soliciting the views of developers in particular. The closing date for submissions is July 26, 2021.

Keep up with everything Apple in the weekly AppleInsider Podcast -- and get a fast news update from AppleInsider Daily. Just say, "Hey, Siri," to your HomePod mini and ask for these podcasts, and our latest HomeKit Insider episode too.If you want an ad-free main AppleInsider Podcast experience, you can support the AppleInsider podcast by subscribing for $5 per month through Apple's Podcasts app, or via Patreon if you prefer any other podcast player.AppleInsider is also bringing you the best Apple-related deals for Amazon Prime Day 2021. There are bargains before, during, and even after Prime Day on June 21 and 22 -- with every deal at your fingertips throughout the event.

hydrogen · June 15, 2021 11:24AM

OK. So Airbus and Boeing, clearly in a duopole situation on commercial airplanes, are to be fined , dismantled ? (to leave room for China, of course ...)

darkpaw · June 15, 2021 11:36AM

I'll tell you what "could be creating problems for consumers and the businesses that want to reach people through their phones": This stupid government!

As a developer, I don't want to have 20 different mobile phone operating systems to code for. I want one or two, because every extra platform costs me time and money, but there aren't *more* consumers to sell my apps to.

When a coffee shop opens on a street, you get, say 40% of people trying it. Another one opens, but 40% of the remaining 60% don't suddenly want a coffee. There is a market of consumers, and they have decided that Apple and Google are just fine. They decided against the Facebook phone, and they decided against the Windows Phone. The market has already decided.

If the CMA decide that the two companies, Apple and Google, have "too much power", maybe they should go after, oh I don't know, the Conservatives and Labour? Those two political parties have "power" all sewn up between them!

harrykatsaros · June 15, 2021 11:45AM

I don’t know why they can possibly expect? You’re not exactly preventing competition and holding back the little guy when Microsoft couldn’t compete for crying out loud. Market preferences are not going to shift and OEMs and developers are not going to want to support yet another platform that further complicates their businesses.

foregoneconclusion · June 15, 2021 12:01PM

Middlemen and malware. That appears to be what both the EU and UK believe is of the most benefit to consumers.

hackintoisier · June 15, 2021 12:03PM

darkpaw said:

There is a market of consumers, and they have decided that Apple and Google are just fine. They decided against the Facebook phone, and they decided against the Windows Phone. The market has already decided.

that’s not strictly true as while Android and Apple became the two major dominant platforms, some consumers still liked Microsoft and RIM. Those private companies chose to shut down their cellphone business though, if they were still in operation, they likely would have a user base, albeit much smaller than android and Apple.

But you have to remember that from a government point of view, they tend to prefer that consumers in any market place have choice. So no one or two suppliers grow so dominant as to stifle innovation and prevent competition. This is the government world view: to protect consumer choice.

Remember when at&t used to be the dominant phone company in the USA, the government broke it up and now we have Verizon and at&t (we used to have others like cellular one, but they somehow merged back into at&t again.)

So when there is a duopoly like you have rightfully pointed out, governments want to ensure that consumers aren’t being shafted that there is adequate choice, and also that innovation isn’t being stifled.

On the Apple App Store, Apple is the gatekeeper of what apps can and cannot be on the iPhone and iPad. This may be stifling innovation as Apple might deny apps that would otherwise be very popular with consumers. For example, what if we had apps that replaced the default homescreen on iPadOS with better multitasking and windowing support, users might pay for that, but Apple would never allow such a thing on the App Store, thus preventing competition, as well as preventing an ambitious developer from making any revenue on this idea.

This is why governments are looking into this issue. Should Apple have that much power? Who is Apple or even Google to say that certain ideas shouldn’t be able to come to market (like a better window manager than the iPadOS default) ?

gilly33 · June 15, 2021 12:06PM

This shit is happening ‘everywhere’. These clowns feigning that they have the consumer interest in mind when we know better. Duopoly. Really? You had a bunch of mobile platforms and several years of competition later they are two that are dominant. Plus I like in Apple’s case it’s ‘walled garden’. As a consumer I don’t want any and everybody dropping apps in the App Store.

verne arase · June 15, 2021 12:27PM

*Sigh* ... with all these investigations going on, regulators are beginning to think that folks will be thinking that they aren't doing their jobs unless they chime in and initiate their own investigations.

Problem is: smartphones are really a new (or newish) category of device: They are the most personal devices yet, and require high levels of security to protect your personal data in a device which doesn't simply sit at home protected behind your firewall.

They're portable and go where you do - out into the wild where attackers can get to your device, and they're capable of surveilling your movements and actions and purchases to an unprecedented degree, and if they're not properly vetted applications can assist with that surveillance.

Complainants point to a Windows PC and say that's what smartphones should be like - but the amount of personal data doesn't begin to compare with that of a smartphone - and this is something I think regulators are missing.

For what it's worth, Apple (and their Xerox-like competitors) have created a new class of device which if not protected can end up disbursing a tremendous amount of information about you, your family, and your activities and location - and regulators need to understand that we need an extraordinary security bubble that companies like Epic Games lack both the capability and inclination to maintain. They also need to realize that when a company creates an such a completely protected environment and technological ecosystem that they have the right to profit from the fruits of their enormous investment - unless you want there to be less innovation when it comes to initiating, evolving, and revolutionizing those environments and devices yet to come.

foregoneconclusion · June 15, 2021 12:27PM

hackintoisier said: On the Apple App Store, Apple is the gatekeeper of what apps can and cannot be on the iPhone and iPad. This may be stifling innovation as Apple might deny apps that would otherwise be very popular with consumers. For example, what if we had apps that replaced the default homescreen on iPadOS with better multitasking, users might pay for that, but Apple would never allow such a thing on the App Store, thus preventing competition. This is why governments are looking into this issue.

In the U.S., Congress has basically admitted that it can't find convincing proof of anticompetitive behavior. That's why they've chosen the market cap approach. It allows them to skip the relitigating of the business market and simply make legal activity for smaller companies illegal for bigger ones. Whether that will stand up in court remains to be seen.

avon b7 · June 15, 2021 12:45PM

gilly33 said:

This shit is happening ‘everywhere’. These clowns feigning that they have the consumer interest in mind when we know better. Duopoly. Really? You had a bunch of mobile platforms and several years of competition later they are two that are dominant. Plus I like in Apple’s case it’s ‘walled garden’. As a consumer I don’t want any and everybody dropping apps in the App Store.

You've answered the question by admitting that two are dominant. That supports the 'duopoly' claim.

In the consumer realm, that is a very bad thing and when duopolies are de facto gatekeepers it just gets worse.

I've said it many times before but I don't believe this has to be a problem in itself as long as the consumer is made fully aware of what it entails.

So, if Apple or Google ask users to sign over acceptance of their rules (explained in crystal clear language), that should be fine.

The issue is that the vast majority of users have no idea what they are 'agreeing' to when they buy a device or use a service and if you were to point out each and every instance many would not agree with it.

Apple and Google (and by omission government) have stifled competition and harmed consumers.

The situation has come about over more than a decade but, as we enter a fully digital age, updated projections are needed.

NOTHING should tie a user to a given platform. Moving to another platform should be a painless, transparent operation on every level and be undertaken within a time framework.

williamlondon · June 15, 2021 12:52PM

Opportunistic jumping on the proverbial bandwagon and/or bribery on the part of other behemoths who want to see these dismantled for greedy reasons.

hydrogen · June 15, 2021 1:05PM

avon b7 said:

gilly33 said:

NOTHING should tie a user to a given platform. Moving to another platform should be a painless, transparent operation on every level and be undertaken within a time framework.

I am sure Apple would not mind making sure this is possible ...... if the competitor does it, too ....

22july2013 · June 15, 2021 1:17PM

The UK is a small, unimportant market, so Apple and Google would do well to mutually pull out of that market for five years minimum as a courtesy to the UK's Competition and Markets Authority.

genovelle · June 15, 2021 1:30PM

hackintoisier said:

darkpaw said:

There is a market of consumers, and they have decided that Apple and Google are just fine. They decided against the Facebook phone, and they decided against the Windows Phone. The market has already decided.

that’s not strictly true as while Android and Apple became the two major dominant platforms, some consumers still liked Microsoft and RIM. Those private companies chose to shut down their cellphone business though, if they were still in operation, they likely would have a user base, albeit much smaller than android and Apple.

But you have to remember that from a government point of view, they tend to prefer that consumers in any market place have choice. So no one or two suppliers grow so dominant as to stifle innovation and prevent competition. This is the government world view: to protect consumer choice.

Remember when at&t used to be the dominant phone company in the USA, the government broke it up and now we have Verizon and at&t (we used to have others like cellular one, but they somehow merged back into at&t again.)

So when there is a duopoly like you have rightfully pointed out, governments want to ensure that consumers aren’t being shafted that there is adequate choice, and also that innovation isn’t being stifled.

On the Apple App Store, Apple is the gatekeeper of what apps can and cannot be on the iPhone and iPad. This may be stifling innovation as Apple might deny apps that would otherwise be very popular with consumers. For example, what if we had apps that replaced the default homescreen on iPadOS with better multitasking and windowing support, users might pay for that, but Apple would never allow such a thing on the App Store, thus preventing competition, as well as preventing an ambitious developer from making any revenue on this idea.

This is why governments are looking into this issue. Should Apple have that much power? Who is Apple or even Google to say that certain ideas shouldn’t be able to come to market (like a better window manager than the iPadOS default) ?

Microsoft and rim failed to create enough demand for their products as customers choose other option. Apple sells a premium product against a bunch of cheaper ones. But their customers chose them against 100s of options that had more features. Apple made better products with features more people cared about and made them easy to use. They made the products we wanted and the platform we prefer and now haters are trying to devalue our investment into their ecosystem. It’s not their job to make everyone else including developers happy. It’s their job to make their paying customers happy by giving us what we signed up for.

If they force a change to how our platform works which will decrease my value, Privacy and security, we should sue everyone involved in this for cost of our devices in a class action suit.

rotateleftbyte · June 15, 2021 1:33PM

This is the UK flexing its muscles now that we are no longer part of the EU.

As for being a small unimportant market, Apple has significant investments here. Pulling out would irreparably harm their reputation. Google OTOH is mostly a front operation with their main business carried out in Ireland.

I am not looking forward to having to use that terrible apology of an OS called Windows ever again. I know that I'm not alone in that.
For me, 20+ years of developing software for Windows sucked the creative life out of me.

elijahg · June 15, 2021 1:49PM

22july2013 said:

The UK is a small, unimportant market, so Apple and Google would do well to mutually pull out of that market for five years minimum as a courtesy to the UK's Competition and Markets Authority.

This is such a laughable and ignorant statement, many of the less informed (and of course those with their heads far up Apple's ass) here like to peddle it. For a start Apple bends over backwards to please the Chinese government whenever they make a demand rather than pulling out, even if it's against their supposed moral values. Apparently those values don't apply when it might harm profit. Secondly there are many competition investigations against Apple right now, should Apple pull out of every country where they are happening? So the US and EU too? Thirdly, dropping one of Apple's traditionally best-performing countries because of an investigation into their rules is on the same level of a toddler having a tantrum for being told to share their toys. Sounds like a pretty dumb idea.

22july2013 · June 15, 2021 2:45PM

elijahg said:

22july2013 said:

The UK is a small, unimportant market, so Apple and Google would do well to mutually pull out of that market for five years minimum as a courtesy to the UK's Competition and Markets Authority.

This is such a laughable and ignorant statement, many of the less informed (and of course those with their heads far up Apple's ass) here like to peddle it. For a start Apple bends over backwards to please the Chinese government whenever they make a demand rather than pulling out, even if it's against their supposed moral values. Apparently those values don't apply when it might harm profit. Secondly there are many competition investigations against Apple right now, should Apple pull out of every country where they are happening? So the US and EU too? Thirdly, dropping one of Apple's traditionally best-performing countries because of an investigation into their rules is on the same level of a toddler having a tantrum for being told to share their toys. Sounds like a pretty dumb idea.

I might agree with you if it weren't for the fact, which you don't address, that pulling out of a market would make the people really upset with their government, and they would elect a government that wasn't so paranoid about big tech. If Apple doesn't put up a fight, totalitarian governments will win and keep demanding more from Apple and other companies. At some point Apple needs to put up a fight, but you seem to want Apple to accede to every demand. Following your approach, Apple will lose in the long run.

genovelle · June 15, 2021 2:51PM

elijahg said:

22july2013 said:

The UK is a small, unimportant market, so Apple and Google would do well to mutually pull out of that market for five years minimum as a courtesy to the UK's Competition and Markets Authority.

This is such a laughable and ignorant statement, many of the less informed (and of course those with their heads far up Apple's ass) here like to peddle it. For a start Apple bends over backwards to please the Chinese government whenever they make a demand rather than pulling out, even if it's against their supposed moral values. Apparently those values don't apply when it might harm profit. Secondly there are many competition investigations against Apple right now, should Apple pull out of every country where they are happening? So the US and EU too? Thirdly, dropping one of Apple's traditionally best-performing countries because of an investigation into their rules is on the same level of a toddler having a tantrum for being told to share their toys. Sounds like a pretty dumb idea.

Actually it a great idea! When a low volume country decides to investigate and try to create rules to suit a few whiners who are too lazy to invest to compete. In fact some of these companies have CEOs who are worth 4-5 times Tim Cook who presides over a company 200 times their size. Maybe they should tell these Companies to reinvest to compete instead of lobbing the government to stop competitors.

They should shut down any states that propose laws that would impede them providing services promised to paying customer like me. China is not stupid enough to try to undermine the App Store because they see the value and knows Apple is a business not a charity. Car makers leave unprofitable regions all the time and as a global company, just like Apple only sell products in regions they can be profitable and the laws make sense, if those laws change they should exit when the laws don’t make sense. The App Store is a product and of condition mean it is not profitable to sustain at a level determined by Apple, all investments will cease. It has happened before and it will happen again. Apple is a business that creates value for their customers and we are happy to pay for it. Other companies believe value is cheap and most fail because of it. That is the problem with companies like Spotify. Their model is not successful and this is their attempt to become profitable. They created the failed model. If they created a business plan that was not based on giving things away they would be profitable. It’s not Apple’s responsibility to make them profitable b

rotateleftbyte · June 15, 2021 3:50PM

22july2013 said:
I might agree with you if it weren't for the fact, which you don't address, that pulling out of a market would make the people really upset with their government, and they would elect a government that wasn't so paranoid about big tech. If Apple doesn't put up a fight, totalitarian governments will win and keep demanding more from Apple and other companies. At some point Apple needs to put up a fight, but you seem to want Apple to accede to every demand. Following your approach, Apple will lose in the long run.

There is a world of difference between a company pulling out of a market and a company being told to leave by the Government.
The former would cause the population to blame the company while the latter would cause them to blame the government.

JBSlough · June 15, 2021 4:49PM

hydrogen said:

avon b7 said:

gilly33 said:

NOTHING should tie a user to a given platform. Moving to another platform should be a painless, transparent operation on every level and be undertaken within a time framework.

I am sure Apple would not mind making sure this is possible ...... if the competitor does it, too ....

In reality, wouldn’t this be up to the app developers? If Apple and Google decided that all app developers have to be able to help users switch platforms, then the developers would be angry, no?

22july2013 · June 15, 2021 5:03PM

rotateleftbyte said:

22july2013 said:
I might agree with you if it weren't for the fact, which you don't address, that pulling out of a market would make the people really upset with their government, and they would elect a government that wasn't so paranoid about big tech. If Apple doesn't put up a fight, totalitarian governments will win and keep demanding more from Apple and other companies. At some point Apple needs to put up a fight, but you seem to want Apple to accede to every demand. Following your approach, Apple will lose in the long run.

There is a world of difference between a company pulling out of a market and a company being told to leave by the Government.

Not if the company left the country because the government made it impossible to make money if the new policy, when implemented world-wide, would break their profits.

UK to investigate Apple and Google's 'effective duopoly'

Comments