CMA shelves app store probes to leverage digital market powers

Signalling its intent to leverage new powers granted by the Digital Markets, Competition, and Consumers Act (DMCCA), the Competition and Markets Authority (CMA) has closed its investigations into Google’s Play Store and Apple’s App Store.

The investigations – launched over concerns that both tech giants were unfairly leveraging their dominant market positions, to the detriment of UK app developers and consumers – focused primarily on rules mandating the use of proprietary in-app payment systems. The CMA argued these rules stifle competition, limit consumer choice, and potentially lead to inflated prices. 

Google’s attempts to appease the watchdog with proposed concessions, dubbed ‘Developer-only Billing’ (DOB) and ‘User Choice Billing’ (UCB), proved insufficient. These proposals, intended to offer developers alternative payment options, were deemed inadequate following consultation with industry players. 

App developers – voicing their feedback to the CMA – argued that Google’s concessions fell short, leaving them tethered to the tech giant’s payment infrastructure through hefty commission fees and potentially disruptive ‘pop-up screens’ during transactions.

The CMA’s decision to close the investigations comes amidst the recent enactment of the DMCCA. This new legislation equips the watchdog with enhanced powers to address competition concerns within the digital marketplace. Crucially, it paves the way for the designation of companies like Google and Apple as having ‘strategic market status’ in areas like mobile ecosystems. 

“Once the new pro-competition digital markets regime comes into force, we’ll be able to consider applying those new powers to concerns we have already identified through our existing work,” said Will Hayter, Executive Director for Digital Markets at the CMA.

This shift in approach suggests the CMA is poised to deploy its expanded arsenal should either tech titan be designated with ‘strategic market status’. This designation would grant the CMA a broader purview to address competition issues holistically, potentially leading to more comprehensive interventions.

“It’s critical that tech businesses in the UK, including app developers, can have access to a fair and competitive app ecosystem, helping to grow the sector, boost investment, and result in better outcomes for UK consumers,” added Hayter. “These are all factors we are considering before launching our first investigations under the new regime.”

The CMA’s decision signals a new chapter in the ongoing tussle to ensure fairness and competition within the app economy.  With its sights set on the DMCCA’s potent toolkit, the watchdog aims to tackle any perceived market imbalances head-on.

(Photo by Mika Baumeister)

See also: Epic Store debuts on EU iPhones

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Tags: android, app store, cma, coding, competition, development, dmcca, ios, law, legislation, mobile, monopoly, play store, programming