Apple, Google hit with UK scrutiny as regulator pushes for mobile changes

Britain’s competition regulators on Wednesday took aim at the mobile ecosystems of Apple and Google, pushing the two companies to make changes to areas like their app stores.

On Wednesday, the Competition and Markets Authority proposed designating the U.S. tech giants as having a “strategic market status” or SMS, after opening an investigation into the matter in January.

This designation is given to a large company that has “substantial and entrenched market power” and a “position of strategic significance” with respect to a digital activity in the U.K.

The CMA can force firms that are branded as having SMS to change or stop specific behaviors or practices in order to address competition concerns.

Britain’s regulator focused on investigating Apple and Google’s mobile operating systems, app store and browser. One aspect of the investigation looked at whether there are barriers that may prevent other competitors from offering rival products and services on the U.S. tech giants’ mobile platforms.

Another part of the probe examined whether Apple and Google are using their position in operating systems, app distribution or browsers to favor its own apps and services.

And the final aspect of the investigation studied whether Apple and Google require developers to sign up to “unfair terms and conditions” in order to distribute their apps via the respective app stores.

Google’s Android operating system commands just over 61% market share in the U.K., while Apple’s iOS has just over a 38%, according to Kantar data. Google runs the Google Play store and Chrome browser, and Apple has its App Store and Safari browser.

Apple and Google’s regulatory problems on the continent of Europe continue to deepen.

In April, European Union regulators hit Apple with a 500 million euro ($587 million) fine for breaching the Digital Markets Act (DMA) — a landmark law aimed at tackling tech competition issues.

Apple has been forced to make a number of changes to the way it operates in the EU this year. These include allowing developers to tell their users about cheaper alternatives and bypass Apple’s in-app payment system.

However, some of the changes have yet to satisfy the EU regulators. Apple in June revealed a complex system of App Store fees in a bid to comply with the DMA and avoid the 500 million euro fine. Apple plans to appeal the fine.

Apple has long argued that forced regulator-led changes to its operations could lead to privacy and security issues for users and confusing business terms for developers

In March, Google parent Alphabet meanwhile was accused by the EU of failing to comply with the DMA. The European Commission, the EU’s executive arm, said Google is treating its own search services more favorably than those of rivals. The Commission added that Google’s app store is preventing developers from steering consumer to other channels for better offers.

The search giant is also looking to fight a 4.1 billion euro fine that has stemmed from an antitrust case dating back to 2018.