By Edith Hancock
The U.K.'s Competition and Markets Authority said Friday that its experts recommended investigating Apple and Google's dominance in smartphones under the country's new digital competition rules, alleging the tech giants can manipulate users into choosing their own apps and services over rivals'.
The CMA said Apple and Google have an effective duopoly on mobile ecosystems through the market dominance of their smartphone operating systems, app stores and mobile web browsers Safari and Chrome.
It said opening investigations would be the first step toward forcing the companies to comply with the Digital Markets, Competition and Consumers Act, the U.K.'s new tech law designed to boost competition for businesses online. The CMA can investigate companies it believes have so-called strategic market status through ownership of platforms such as smartphone operating systems and app stores. If it decides they have that status, it can then restrict how they run those platforms by banning them from favoring their own products and services over rivals'.
"We have provisionally found that competition between different mobile browsers is not working well and this is holding back innovation in the U.K.," Margot Daly, chair of the CMA's independent inquiry group, said in a statement.
Most of the issues the group found relate to how web browsers work on Apple's iPhones, the CMA said. Apple's Safari browser is set as a default on iPhone operating systems.
It said Apple's terms for browser developers prevent them from offering new features, adding that some rivals complained that they can't offer faster webpage loading on iPhones. According to the CMA, a revenue-sharing agreement between Google and Apple significantly reduced their incentive to compete for mobile browser users on Apple's smartphones.
Apple said it disagreed with the findings, adding that forcing the company to change to comply with U.K. tech rules would undermine user privacy and security.
"We will continue to engage constructively with the CMA as their work on this matter progresses," it said.
Google didn't immediately respond to a request for comment.
Both companies are under fire from antitrust regulators keen to tackle structural problems in the digital economy that make it harder for smaller businesses to reach customers. The European Commission is also investigating Apple and Google over concerns they are breaking the Digital Markets Act, the European Union's own new digital rulebook.
Write to Edith Hancock at edith.hancock@wsj.com
(END) Dow Jones Newswires
November 22, 2024 08:18 ET (13:18 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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