Apple and Google "hold all the cards," watchdog says

The UK wants to investigate Apple and Google's market power in mobile browsers and Apple's restrictions on cloud gaming through its App Store.

"When it comes to how people use mobile phones, Apple and Google hold all the cards. As good as many of their services and products are, their strong grip on mobile ecosystems allows them to shut out competitors, holding back the British tech sector and limiting choice," Andrea Coscelli, Chief Executive of the Competition and Markets Authority (CMA,) said.

The CMA is consulting on launching a market investigation into Apple and Google's market power. It is also taking enforcement action against Google concerning its app store payment practices.

"We all rely on browsers to use the internet on our phones, and the engines that make them work have a huge bearing on what we can see and do. Right now, choice in this space is severely limited, and that has real impacts – preventing innovation and reducing competition from web apps. We need to give innovative tech firms, many of which are ambitious start-ups, a fair chance to compete," Coscelli said.

97% of all mobile web browsing in the UK happens on browsers powered by either Apple's or Google's browser engine. Apple bans alternatives to its browsing engines, and the CMA is concerned this severely limits the potential for rival browsers to differentiate themselves from Safari and limits Apple's incentives to invest in its browser engine.

The CMA also noted that Apple has blocked the emergence of cloud gaming services on its App Store, and mobile users might miss out on the full benefits of cloud gaming.

The CMA is investigating Google's distribution of apps on Android devices in the UK, in particular, Google's Play Store rules which oblige certain app developers to use Google's own payment system for in-app purchases.

Alongside Friday's announcements, there are eight other cases open against major players in the tech industry.

Last December, Britain's competition regulator said it was concerned that Apple and Google's duopoly is causing millions of people across the UK to lose out.

Google and Apple dominate the market when it comes to choosing a phone. By controlling iOS and Android, companies also exercise controls over online content, which, according to the CMA, can limit innovation and choice and lead to higher prices.

Last year, the CMA launched a probe over concerns that Apple and Google have too much control over operating systems (iOS and Android,) app stores (App Store and Play Store,) and web browsers (Safari and Chrome) that together form their ecosystems.

Apple and Google can control how online content, such as mobile apps and websites, is provided to users because when someone buys a mobile device, they end up with either iOS or Android.

"Without interventions, both companies are likely to maintain, and even strengthen, their grip over the sector, further restricting competition and limiting incentives for innovators," CMA said.