Are Apple and Google Blocking Fair Competition in the Mobile Browser Market?

The United Kingdom’s mobile browser market is not functioning effectively for consumers and businesses, according to a final report from the Competition and Markets Authority (CMA). The report primarily blames Apple and Google for limiting competition in the mobile browser space, restricting choices for users and developers alike.

An independent inquiry group investigated mobile browsers in-depth and identified several key issues, particularly with Apple’s control over iOS and Google’s influence on Android. According to the CMA, Apple’s strict policies surrounding its Safari browser and WebKit engine make it difficult for third-party developers to compete. Since Apple requires all browsers on iOS to run on WebKit, it limits the ability of competitors to offer innovative alternatives. Additionally, Safari enjoys privileged access to certain features that third-party browsers do not, further discouraging competition.

Are Apple and Google Blocking Fair Competition in the Mobile Browser Market?

Apple also pre-installs Safari as the default browser on iPhones. While users can change the default browser, the CMA believes Safari’s pre-installation reduces awareness of alternatives and discourages users from switching. Similarly, Google Chrome is the default browser on most Android devices, creating similar concerns about restricted competition.

Although Apple and Google have introduced changes in response to earlier provisional findings from the CMA in November, the regulator says these measures have only addressed some concerns and have not fully resolved the issues related to competition.

Financial Incentives and Market Restrictions

Another major concern highlighted by the investigation is the revenue-sharing agreement between Apple and Google. Under this arrangement, Google pays Apple a substantial share of search revenue in exchange for being set as the default search engine on iPhones. The CMA believes this agreement significantly reduces Apple’s financial motivation to compete in the browser market, further entrenching Google’s dominance in mobile search.

Potential Remedies Proposed by the CMA

To improve competition in the UK’s mobile browser market, the CMA has suggested several remedies, including:

1. Allowing alternative browser engines on iOS – Apple would be required to permit developers to use their own browser engines instead of being restricted to WebKit.
2. Introducing a browser choice screen – Both Apple and Google would have to present users with a selection of web browsers during device setup, rather than setting Safari or Chrome as the default option.
3. Ending revenue-sharing agreements between Apple and Google – The CMA wants to prohibit these arrangements to ensure fair competition in mobile search.

Currently, these proposals are not enforceable, but that could change as the UK government strengthens digital market regulations.

Impact of the Digital Markets, Competition, and Consumers Act (DMCC)

In January, the CMA launched separate investigations into Apple and Google’s mobile ecosystems to determine whether they should be designated as having Strategic Market Status (SMS) under the Digital Markets, Competition, and Consumers Act (DMCC). Similar to the European Union’s Digital Markets Act (DMA), the DMCC allows regulators to impose stricter antitrust requirements on companies with significant market power.

If Apple and Google receive SMS designation, they could face legally binding “conduct requirements” to prevent anti-competitive practices. Regulators could fine companies violating these rules up to 10% of their annual revenue. The CMA has indicated that the findings from the mobile browser investigation could influence future regulatory actions against the tech giants.

CMA’s Position on the Issue

Margot Daly, Chair of the CMA’s independent inquiry group, emphasized the importance of promoting competition in the mobile browser market.

“Following our in-depth investigation, we have concluded that competition between different mobile browsers is not working well, and this is holding back innovation in the UK,” Daly stated.

She also welcomed the CMA’s decision to examine Apple and Google’s mobile ecosystems under the DMCC, stating that the insights from this investigation would aid in shaping regulatory actions moving forward.

Our Thoughts:

The CMA’s findings highlight significant concerns regarding Apple and Google’s control over mobile browsers in the UK. Although companies have made some changes, regulators need to enforce stronger measures to ensure a fair and open market. The outcome of the SMS investigations into Apple and Google, expected later this year, could determine whether the UK government takes stronger action against the two tech giants.

See Also: US Government Pressures Google to Sell Chrome in Ongoing Antitrust Case