The UK’s Competition and Markets Authority (CMA) is taking action to address what it views as a near-duopoly by Apple and Google in the realm of mobile app platforms. The regulator is suggesting reforms that would permit app developers to direct consumers towards alternative payment methods outside of the app stores, potentially bypassing the commissions charged by these tech giants.
Currently, Apple and Google impose fees of up to 30% on certain in-app purchases, a practice that the CMA argues restricts competition by limiting developers’ ability to offer more affordable or varied purchasing options to users. By allowing developers to “steer” customers towards other payment avenues, the regulator believes it could enhance competition within the mobile app market, where Apple and Google dominate the platforms used by most smartphone users in the UK.
Some companies, such as Spotify, have already circumvented app store fees by directing customers to complete purchases on their websites, avoiding the hefty commissions. The CMA posits that eliminating such barriers could expand choices for both businesses and consumers, fostering a healthier competitive environment.
The watchdog is also contemplating whether Apple should open up access to its near-field communication (NFC) technology. This change could enable developers to create alternative contactless payment solutions for iPhones, potentially diversifying payment options available to consumers.
Apple has raised concerns that the proposed changes might compromise user security, privacy, and protection against fraud. Meanwhile, Google indicates it has already made some adjustments to allow developers to guide users to external payment options. The CMA’s initiatives come after it classified Apple and Google as having strategic market status, a designation that grants the regulator increased power to enforce specific business practice rules on these companies.