Monopoly chiefs to probe Apple and Google over phone market ‘takeover’

Monopoly chiefs to probe Apple and Google over phone market ‘takeover’

  • Apple made a global profit of £80bn in 2021 while Google made £57bn
  • Watchdog fears tech giants are exploiting their dominance
  • Such profits “above what one would expect in a properly competitive market”
  • Apple and Google have an effective duopoly on mobile ecosystems, study finds

Watchdogs are gearing up to investigate Apple and Google’s “control” of mobile phone use, browsers and apps.

The Competition and Markets Authority has raised concerns that tech giants are exploiting their dominance to win billions from consumers while stifling competition and innovation.

Significantly, he plans to open a thorough market investigation of the companies, which could force them to change their operating practices without having to wait for new laws.

The CMA pointed out that Apple made a worldwide profit of £80bn in 2021, while the figure for Google was £57bn.

He said: “Although high profits are not necessarily a concern in themselves, these supracompetitive returns are consistently higher than what one would expect in a properly competitive market.”

The watchdog said a year-long study “found that Apple and Google have an effective duopoly on mobile ecosystems that allows them to exert a stranglehold on those markets, which include operating systems, app stores and web browsers on mobile devices”.

The Competition and Markets Authority has raised concerns that tech giants are exploiting their dominance to win billions from consumers while stifling competition and innovation.

Apple and Google (parent company Alphabet) are two tech giants who are accused of exploiting their market dominance in mobile apps through their iOS and Android software platforms respectively to make a profit

Apple and Google (parent company Alphabet) are two tech giants that are accused of exploiting their mobile app market dominance through their iOS and Android software platforms respectively to make “supra-competitive” profits.

CMA Chief Executive Andrea Coscelli said: “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, hold back the UK tech sector and limit choice. We all rely on browsers to use the internet on our phones, and the engines that run them have a huge bearing on what we can see and do.

“The choice in this space is very limited and it has real impacts – preventing innovation and reducing web application competition. We need to give innovative tech companies, many of which are ambitious start-ups, a fair chance to compete.

The government has announced plans to create a Digital Markets Unit to monitor tech companies. It would have the power to crack down on predatory practices and fine companies up to 10% of their global turnover.

However, given concerns about delays in implementing this new regime, the CMA is using existing competition laws to challenge Apple and Google. He also has Facebook, Instagram and Amazon in his sights. Dr Coscelli added: “We have always been clear that we will maximize the use of our current tools pending legislation for the new digital regime.”

The CMA pointed out that Apple made a worldwide profit of £80bn in 2021 while the figure for Google was £57bn.

The CMA pointed out that Apple made a worldwide profit of £80bn in 2021 while the figure for Google was £57bn.

The AMC said that 97% of mobile phone browsing is done through Apple’s Safari or Google’s Android Chrome browser engines. Apple actively prohibits alternatives to Safari. The AMC is concerned that Apple has blocked access to cloud gaming services. These provide mobile access to high-quality games that can be streamed rather than individually downloaded.

As a result, iPhone and iPad users are forced to download game apps from the Apple Store, generating big profits. At the same time, the CMA is launching a competition law investigation into Google’s rules governing access by applications to the listings of its Google Play Store. An investigation is already underway on the terms and conditions of the Apple App Store.

The Daily Mail and MailOnline are suing Google in the US for alleged anti-competitive behavior. This relates to the company’s ability to exploit its dominance in online advertising and potentially manipulate news search results in ways that punish online publishers.

Apple said it respectfully disagrees with a number of the CMA’s conclusions, “which fail to take into account our investments in innovation, privacy and user performance – all of which contribute to the reason for which users love the iPhone and iPad”.

He added: “We believe in thriving and competitive markets where innovation can flourish. Through the Apple ecosystem, we’ve created a safe and reliable experience that users love and a great business opportunity for developers.

Google said: “Android phones give people and businesses more choice than any other mobile platform. Google Play has been the launch pad for millions of apps, helping developers build global businesses that support a quarter of a million jobs in the UK.

“We will continue to engage constructively with the CMA to explain how our approach promotes competition and choice while ensuring that consumer privacy and security are always protected.”

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