Following a nine-month investigation, the Competition and Markets Authority (CMA) has designated Google’s provision of its mobile platform with strategic market status (SMS). The CMA stated that Google’s substantial market power in the provision of its mobile platform is entrenched – Apple has also been designated with SMS.
Google’s business in the UK is estimated to be worth between $10bn and $20bn annually. Earlier this month, the CMA announced that Google search and search advertising had been categorised as SMS. The SMS categorisation for its mobile service means the regulator will now be looking closely at the openness of the company’s mobile platform.
“Apple and Google’s mobile platforms are used by thousands of businesses right across the economy to market and sell products and services to millions of customers, but the platforms’ rules may be limiting innovation and competition,” said Will Hayter, executive director for digital markets at the CMA.
The CMA further stated in its final decision filing: “Given the important role Google’s mobile platform plays as an essential gateway for UK mobile users accessing digital content and services, and for UK businesses developing and distributing digital content and services for mobile, it is imperative that these groups are treated fairly and have trust and confidence in their ability to use it.”
By designating Google and Apple with SMS in relation to their mobile platforms, the CMA said it can now consider whether it is necessary and appropriate to introduce proportionate, targeted interventions to ensure that UK app developers and innovators developing and distributing content via Google and Apple’s mobile platforms are able to innovate and grow their businesses.
The CMA said that SMS designation is not a finding of wrongdoing and does not introduce any immediate requirements. However, it enables the CMA to consider actions to ensure that mobile platforms are open to effective competition.
Following the CMA’s decision, our mobile business in the UK faces a set of new – and, as of yet, uncertain – rules. 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 Oliver Bethell, Google
However, Oliver Bethell, senior competition director at Google, was critical of the CMA’s SMS designation for its mobile platform, given the Labour government’s appetite for pro-growth and pro-innovation regulation.
“Following the CMA’s decision today, our mobile business in the UK faces a set of new – and, as of yet, uncertain – rules. 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 said.
“Android and Chrome were built on the idea of creating more choice, not less. Anyone, including our competitors, can customise and build devices with the open source Android operating system – for free. And while Google Play helps people download apps on their devices, if you don’t find the app you’re looking for, you can download apps from a rival store or directly from a developer’s website – something the majority of Android users actually do, and something other mobile platforms restrict.”
Bethell also noted the CMA’s acknowledgement that Google does not use its position as an operating system or mobile browser engine to favour Chrome.
He said Android generates over £9.9bn in revenue for UK developers and supports more than 457,000 UK jobs. However, the CMS noted that while developers can offer their software on third-party app stores and users have the ability to side-load apps directly onto their Android devices, these methods of app distribution only provide a limited competitive constraint on the Play Store.
It is unclear yet what steps the CMA will take to ensure competition, given the SMS designation of Google’s mobile platform, but it has already been looking into some possible ways to proceed.
In July, the CMA published a roadmap that calls for a fair and transparent app review process and app store rankings to give UK app developers certainty, which would enable users to make purchases outside of app stores. According to the CMA, this could potentially drive innovation and financial savings for developers.
