UK competition watchdog investigates Apple and Google ‘stranglehold’ over the mobile market

UK competition watchdog investigates Apple and Google ‘stranglehold’ over the mobile market


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The UK’s Competition and Markets Authority (CMA) has launched a market investigation into cloud gaming and mobile browsers after its study found Apple and Google constitute a duopoly that controls the mobile ecosystem.

The CMA in June concluded a year-long study of the market for mobile software, hardware, and services. Based on its findings – that Apple and Google have “a stranglehold over operating systems, app stores and web browsers on mobile devices” – the UK competition watchdog said at the time that it intended to escalate by opening a formal investigation.

That inquiry has now begun and it should conclude in no more than 18 months. At that point, the CMA may choose to impose remedies, such as demanding a change in the way certain products are sold, requiring the divestment of business units, or insisting upon the removal of anti-competitive restrictions.

“Many UK businesses and web developers tell us they feel that they are being held back by restrictions set by Apple and Google,” said Sarah Cardell, interim Chief Executive of the CMA, in a statement. “When the new Digital Markets regime is in place, it’s likely to address these sorts of issues.”

“In the meantime, we are using our existing powers to tackle problems where we can. We plan to investigate whether the concerns we have heard are justified and, if so, identify steps to improve competition and innovation in these sectors.”

Separately, the CMA is looking into Google’s ad business and its Chrome “Privacy Sandbox” initiative, while another UK agency, Ofcom, is looking into how Amazon, Microsoft and Google affect competition in the cloud service business.

The CMA in this instance is focused on Apple’s and Google’s control over operating systems, app stores, and web browsers on mobile devices. The watchdog says, “97 percent of all mobile web browsing in the UK in 2021 happens on browsers powered by either Apple’s or Google’s browser engine,” which makes restrictions related to browser engines significant in the context of competition.

The agency also observes that the 800,000 users of cloud gaming services in the UK are affected by restrictions that Apple and Google place on mobile cloud gaming services.

One of the main focuses of the CMA investigation is on Apple’s requirement that all mobile browsers on iOS devices use its own WebKit rendering engine rather than competing browser engines like Google’s Blink (the basis of Chrome) or Mozilla’s Gecko (the basis of Firefox).

“Web developers have complained that Apple’s restrictions, combined with suggested underinvestment in its browser technology, lead to added costs and frustration as they have to deal with bugs and glitches when building web pages, and have no choice but to create bespoke mobile apps when a website might be sufficient,” the CMA said.

The CMA’s market investigation reference [PDF] also says the agency will look at the use of in-app browsers – pseudo-browsers implemented within native apps that aren’t subject to the same limitations as stand-alone browsers.

Rivals and investigators line up

In response to the CMA’s consultation process, various companies that compete with Apple and Google, advocacy groups, and individual developers voiced their concerns about Apple’s and Google’s practices in comments submitted in June that have just been published.

Microsoft endorsed [PDF] the CMAs findings and specifically expressed support for “removing Apple’s restrictions on competing browser engines on iOS devices, mandating access to certain functionality for browsers (including supporting web apps), requiring Apple and Google to provide equal access to functionality through APIs for rival browsers, requirements making it more straightforward for users to change the default browser in their device settings, and offering choice screens to overcome the distortive effects of pre-installation.”

Mozilla likewise expressed support [PDF] for the CMA’s conclusions about the problems arising from Apple’s iOS WebKit restriction and urged the CMA to extend its scrutiny to Chrome’s desktop dominance. Meta meanwhile asked the CMA to expand the scope of its inquiry to cover Apple’s App Tracking Transparency (ATT) privacy settings, which interfere with business models based on ad revenue [PDF].

The Electronic Frontier Foundation observed [PDF], “Apple has a history of invoking security as a procompetitive rationale for its policies, when many of the company’s practices are, in fact, anticompetitive.”

The advocacy organization said it has historically counseled that the answer to restrictive apps stores is competing app stores but it now contends that’s not possible given the market power of Apple and Google.

The EFF wrote, “[T]he dominant mobile platform vendors have woven together a thicket of legal doctrines – including anti-circumvention elements of copyright law, software patent, trade secret, badly drafted cybersecurity laws, onerous contract terms, and exotic tortious interference theories at common law – that create unbearable legal risks for anyone who would offer device owners alternative app stores.”

Open Web Advocacy, a developer rights group, provided 70 pages of analysis [PDF] that cites Apple’s financial interest in maintaining the primacy of native iOS apps (which may generate gatekeeper revenue) over web apps (which can’t be controlled through App Store rules).

“By requiring all browsers on iOS to use the WebKit browser engine, Apple is able to exert control over the maximum functionality of all browsers on iOS and, as a consequence, hold up the development and use of web apps,” the group said. “This limits the competitive constraint that web apps pose on native apps, which in turn protects and benefits Apple’s App Store revenues.”

Various web developers weighed in with comments objecting to Apple’s and Google’s practices. Among these, an individual identified as Mike Padgett offered perhaps the most uninhibited take on the situation.

Padgett wrote [PDF], “It’s insane that I even have to write this email…. somebody please stop Apple from waving their dick around with this ridiculous monopolistic BS concerning the trash ass Safari kit on iOS.”

“There is literally no reason for Apple to maintain this stance, other than pure anti‐competitive greed.”

The Register asked Apple and Google to comment but neither responded.

Both companies however submitted lengthy defenses of their practices earlier this year in response to the CMA’s consultation process.

Google in its comments [PDF] said it welcomes the CMA’s investigation where there are real competition issues – Apple’s iOS rules rather than Android where there’s “scant evidence” of adverse effects on competition.

Apple meanwhile took a less conciliatory tone and rejected the CMA’s findings as flawed.

“Apple considers that a balanced review of the evidence would lead to the conclusion that competition with respect to both mobile browsers and cloud gaming is robust and that, in particular, Apple’s approach provides users with a valuable choice, centered on security, privacy and performance, between ecosystems,” the company said [PDF] through its law firm Gibson Dunn.

As if to underscore the EFF’s observation about Apple’s use of security as a justification for the status quo, Apple’s 15-page submission includes 61 mentions of the word “security.” ®

Tech

via The Register https://ift.tt/3RrYo1V

November 22, 2022 at 10:35PM

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