Apple and Google hit by UK antitrust probe into mobile ecosystem

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LONDON - Britain's competition watchdog launched an investigation into the vast mobile ecosystems of Apple and Google on Thursday to determine whether the two tech giants breached Britain's tough new digital competition rules.

The UK Competition and Markets Authority said it was launching a dual investigation into the two US tech giants to assess whether they have a "strategic market position" in their respective mobile ecosystems, including operating systems, app stores and smartphone-based browsing. device.

The CMA said the investigation will "explore the impact on mobile device users and the thousands of businesses that develop innovative services or content such as apps for these devices".

"Apple believes markets are prosperous and dynamic where innovation can thrive," an Apple spokesperson told CNBC. "We face competition in every segment and jurisdiction in which we operate, and our focus is always on our users' trust. ”

An Apple spokesperson added: "In the UK alone, the iOS app economy supports hundreds of thousands of jobs and enables developers large and small to reach users on a trusted platform." "As the CMA weighs in on this matter We are making progress on this matter and we will continue to engage constructively with the CMA."

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Oliver Bethell, Google's senior director of competition, said the company's Android platform "helps expand choice, lower prices and democratize the use of smartphones and apps."

"This is the only example of a successful and viable open source mobile operating system," Bethell said. He urged "a way forward that avoids stifling choice and opportunity for UK consumers and businesses and does not pose a risk to the UK's growth prospects."

Earlier this week, CMA chairman Marcus Bokkerink was replaced by former Amazon UK country manager Doug Gurr. At the time, the regulator noted that at a recent meeting with the government, regulators had been asked to "remove barriers to business and refocus on promoting growth".

Labor MP Dan Aldridge said by email that the CMA's investigation into Apple and Google was a "crucial step in ensuring a level playing field in our digital economy".

"Companies like Apple and Google decide what content we access and how much we pay," he said in emailed comments Thursday. "These investigations will scrutinize these practices because they may stifle innovation and result in higher prices for consumers."

new powers

The CMA now has enhanced regulatory powers following new UK law, the Digital Markets, Competition and Consumer Act (DMCC), which came into force earlier this year.

The DMCC aims to prevent anti-competitive behavior in digital markets. It can designate large companies with significant market power in a certain digital activity as having a “strategic market position.”

The CMA now has the power to implement changes to prevent potentially anti-competitive behavior by any company that acquires a strategic market position.

Nearly all mobile devices sold in the UK come pre-installed with Apple's iOS or Google's Android operating systems, and their app stores and browsers have exclusive or leading roles on their platforms compared with other products and services, according to the regulator. status.

The CMA added that almost all (94%) people aged 16 or over in the UK (around 56 million consumers) now have access to a smartphone, and the average Briton uses a mobile device for around three hours a day.

The agency said it would examine three key issues, including the extent of competition between Apple and Google's mobile ecosystems, the tech giants' potential use of market power for other activities, and potential exploitative behavior.

CMA chief executive Sarah Cardell said in a statement on Thursday: "A more competitive mobile ecosystem can foster new innovation and new services across a range of services used by millions of people. opportunities, whether it’s app stores, browsers or operating systems.”

Caddell added: “Better competition could also boost growth in the UK, with businesses able to offer new and innovative products and services on Apple and Google’s platforms.”