The Competition and Markets Authority (CMA) has just launched a probe into Apple and Google as the regulator reckons their duopoly limits competition and choice.
The probe’s chief goal was to investigate concerns that the tech titans possess too much control over the mobile space through their app stores, web browsers and operating systems (OS). In a December 2021 interim report, the CMA suggests this level of control and power could be potentially detrimental to users.
Andrea Coscelli, Chief Executive of the CMA, says Apple and Google have developed a “vice-like grip over how we use mobile phones and we’re concerned that it’s causing millions of people across the UK to lose out”.
He notes they are not only “are the main players when it comes to choosing a phone” but also “set all the rules too – from determining which apps are available on their app stores, to making it difficult for us to switch to alternative browsers on our phones. This control can limit innovation and choice, and lead to higher prices…”
The CMA has provisionally found that Apple and Google have been able to use their market power to create “largely self-contained ecosystems”. As a result, it is “extremely difficult for any other firm to enter and compete meaningfully with a new system”.
Both firms argue that many of these controls are needed to maintain the security and quality of the overall service to their users, and in some cases to safeguard users’ personal information.
For a better picture of this conflict, let’s take a quick look at some areas of the mobile space and see how big these giants really are.
A mobile device’s OS is essentially its brain, the thing that allows it to perform all the functions that we now use and rely on in our day-to-day lives. Before we can develop and download apps, we need to pick the OS we use. In that space, Google and Apple’s shared dominance is staggering. According to a recent Statista study tracking the global market share of the mobile OS market from January 2012 to June 2021, the Google-sponsored Android OS held a staggering 72.84% of the market, while Apple’s iOS held 26.34%.
The “Unknown/Other” category trailed in 3rd at 0.82%. Statistically speaking, if anyone reads this article on a mobile device, it will be through Android or iOS.
The CMA found that, in the UK, “more than half of all smartphones in use in 2020 were Apple iPhones, while the rest were all using a version of the Android operating system”.
One of the most-used features on someone’s phone is likely their web browser. In this market, Google and Apple are still at the very top but seem to have less of a hold than they do over mobile OS.
Web analytics experts from Statcounter Global Stats examined the mobile browser market from November 2020 to November 2021. In that time, they determined that the Google Chrome browser held a 63.06% share, Apple’s Safari a 25.86% share, Samsung Internet a 5.2% share, Opera a 2.03% share, Alibaba’s UC Browser a 1.7% share, and the Android browser used by Android devices before adopting Chrome held a ).68% share.
However, these numbers are slightly misleading. Google Chrome is built on the free, open-source codebase Chromium developed and maintained by Google. Being free and open-source, many other browser developers have adopted Chromium as well. This includes Samsung Internet, Opera and UC Browser. While Google sees no direct profits from these companies’ use of Chromium, that does mean 71.99% of the global mobile browser market is in some way influenced by Google. Combined with Safari, that means 97.85% of mobile browsers in the current global market run on code originating from Google or Apple.
According to CMA’s own research: “Apple’s and Google’s browsers account for 90% of browser usage on mobile devices in the UK.”
The App Stores
The final stop on our trip through the mobile market is app stores. If we measure by sheer quantity of apps, Google and Apple once again outpace the competition by miles. In an analysis of the first quarter of 2021, Statista found that the Google Play Store had nearly 3.5 million apps available for download on the platform. The Apple App Store offered over 2.2 million apps. The next-closest platform, the Windows Store, offered 669,000 apps.
In CMA’s research, over 95% of the UK’s “native app downloads” came from either the Play Store or the App Store.
When it comes to the CMA checking out Apple and Google, then the situation is far from over. The CMA says it consulting on its initial findings and welcomes responses by 7 February 2022. It will be continuing with the second half of the study and expects to issue a final report in June 2022.
Monopolies and duopolies have been an issue in the tech industry for decades at this point. In 2001, the US government took Microsoft to court over antitrust law violations in the computer market space. In late 2020, the US Federal Trade Commission did the same to the former Facebook over its grip on social networking. Amazon was hit with the same by the Washington DC attorney general in May 2021 over illegal price raising allegations on its Amazon Marketplace.
Google is dealing with two such cases right now, one in the US and one in the EU. Apple handled such allegations earlier in this year as well, after video game publisher Epic Games took them to court.
With any luck, further such cases will be raised more frequently in the mobile space as well. No matter what, a consumer’s choices on what phone to buy, what apps to download, what browser to use, will inevitably lead them back to the binary choice of Apple or Google. When a consumer’s choices in a market are that limited, it is ultimately unhealthy for the market as a whole.