UK Designates Apple and Google as Duopoly: New Regulatory Framework Aims to Increase Competition in Mobile Ecosystems

Google has warned that unfavorable regulation could delay new product launches in the UK.

United Kingdom:

Britain's competition watchdog announced on Wednesday that Apple and Google will face stricter regulation of their mobile platform services under new measures targeting technology giants.

Following a nine-month investigation, the Competition and Markets Authority (CMA) has designated both companies with "strategic market status" (SMS) in its final decision.

Both companies expressed opposition to the SMS designation, with Google describing it as "disappointing, disproportionate and unwarranted."

These new UK measures parallel the European Union's Digital Markets Act, which includes potential significant financial penalties.

"Apple and Google's mobile platforms are used by thousands of businesses throughout the economy... but the platforms' rules may be limiting innovation and competition," stated Will Hayter, executive director for digital markets at the CMA.

The CMA previously characterized their dominance as "an effective duopoly," noting that virtually all mobile phones sold in the UK come pre-installed with either Apple's iOS operating system or Google's Android system.

Furthermore, their "app stores and browsers have either exclusive or leading positions on their platforms compared to alternative products and services," the CMA added.

An SMS designation empowers the CMA to require Apple and Google to modify certain mobile service operations, aiming to provide consumers with greater choice.

UK regulators initiated the investigation into Apple and Google's control over mobile ecosystems in January.

'Weaker Privacy'

Google indicated that the regulator's conclusion affects its Android operating system, Play online store, and Chrome browser.

"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," he added.

Apple argued that "UK's adoption of EU-style rules would undermine" its objective to "create the best products, services and user experience."

The company also cautioned that users would experience "weaker privacy and security, delayed access to new features, and a fragmented, less seamless experience."

"We've seen the impact of regulation on Apple users in the EU, and we urge the UK not to follow the same path," Apple stated.

Wednesday's announcement follows Google's recent SMS designation for its dominance in online search, with the CMA still deliberating on the exact rules to enforce.

Google has warned that unfavorable regulation could delay the introduction of new products in the UK.

Last month, the company announced a £5 billion ($6.7 billion) investment in the UK over the next two years to support the country's AI initiatives.

Google employs more than 7,000 people in the UK, while Apple employs nearly 8,000.