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The
Competition and Markets Authority escalated scrutiny of the two
U.S. tech companies by labeling them with “strategic market
status.” It follows separate investigations that the CMA opened
at the start of the year into Google’s Android and Apple’s iOS
using newly acquired digital market regulations designed to
protect consumers and businesses from unfair practices by Big
Tech companies.
The regulator's decision was expected. It proposed the
classifications in July but sought feedback before releasing its
final decision.
Google called the decision “disappointing, disproportionate and
unwarranted," and has contended previously that Android has
saved app developers money because they didn’t have to adapt to
different operating models for each smartphone.
“Following the CMA’s decision today, our mobile business in the
UK faces a set of new – and, as of yet, uncertain – rules," said
Oliver Bethell, senior competition director at Google. "The
CMA’s next steps will be crucial if the UK’s digital markets
regime is to meet its promise of being pro-growth and
pro-innovation.”
Google was already given the “strategic market status”
designation earlier this month, when the CMA wielded its new
powers for the first time by targeting the company's role in a
separate investigation into the online search advertising
market.
The CMA says being labeled with “strategic market status”
doesn’t imply any wrongdoing. But it means the watchdog has the
power to use targeted measures to open up competition and ensure
consumers and businesses are treated fairly.
The watchdog has said Apple and Google hold an “effective
duopoly,” with 90-100% of mobile devices in Britain running on
either mobile platform. Its investigation found a range of
concerns affecting businesses and consumers such as
unpredictable app reviews, inconsistent app store search
rankings and commissions on in-app purchases of as much as 30%.
The CMA had unveiled separate “road maps” for each company
outlining possible measures to improve competition, including
“fair and transparent” app reviews and app store rankings to
give British app developers “certainty.”
The watchdog had also recommended letting app developers “steer”
users to channels outside of app stores where users can make
purchases, mirroring similar efforts by the European Union.
Apple has said it was worried the CMA’s moves could pose
increase risks for users and jeopardize the U.K.’s “developer
economy.”
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