After a nine-month investigation, the Competition and Markets Authority (CMA) found Google providing its mobile platform with strategic market status (SMS). The CMA said Google's significant market power in providing its mobile platform was entrenched – Apple was also singled out for SMS.
Google's UK business is valued at $10–20 billion a year. Earlier this month the CMA announced that Google search and search advertising have been categorized as SMS. The categorization of SMS for mobile services means that the regulator will now closely monitor the openness of a company's mobile platform.
“Apple and Google's mobile platforms are used by thousands of businesses across the economy to promote and sell products and services to millions of customers, but platform rules can limit innovation and competition,” said Will Hayter, executive director of digital markets at the CMA.
The CMA further stated in its final decision: “Given the important role that Google's mobile platform plays as the primary gateway for UK mobile users accessing digital content and services, and for UK businesses developing and distributing digital content and services for mobile devices, it is vital that these groups are treated fairly and have trust and confidence in their ability to use them.”
Having designated Google and Apple SMS in relation to their mobile platforms, the CMA said it can now consider whether it is necessary and appropriate to introduce proportionate, targeted measures to ensure that UK app developers and innovators developing and distributing content through Google and Apple's mobile platforms are able to innovate and develop your business.
The CMA said the SMS indication does not constitute an admission of wrongdoing and does not create any compelling requirement. However, this allows the CMA to consider actions to ensure mobile platforms are open for effective competition.
Following the CMA's decision, our UK mobile business faces a series of new – and as yet undefined – regulations. The CMA's next steps will be critical if the UK's digital markets regime is to deliver on its promise to promote economic growth and innovation.
Oliver Bethell, Google
However, Oliver Bethell, senior director of competition at Google, criticized the CMA's SMS designation for its mobile platform given the Labor government's push for regulation to promote economic growth and innovation.
“Following today's decision by the CMA, our UK mobile business faces a set of new – and as yet uncertain – rules. The CMA's next steps will be critical if the UK's digital markets regime is to deliver on its promise to drive economic growth and innovation,” he said.
“Android and Chrome were created with the goal of creating more choice, not less. Anyone, including our competitors, can customize and build devices running the open source Android operating system—for free. And while Google Play helps people download apps to their devices, if you can't find the app you're looking for, you can download apps from a competing store or directly from developer website – something that most Android users actually do, and something that other mobile platforms limit.”
Bethell also noted the CMA's acknowledgment that Google is not leveraging its position as an operating system or mobile browser engine in favor of Chrome.
He said Android generates more than £9.9 billion in revenue for UK developers and supports more than 457,000 jobs in the UK. However, CMS noted that while developers can offer their software in third-party app stores and users have the ability to download apps directly to their Android devices, these app distribution methods provide only limited competitive control in the Play Store.
It is unclear what steps the CMA will take to ensure competition given the SMS designation of Google's mobile platform, but it is already considering some possible ways to proceed.
In July The CMA has published a roadmap this requires a fair and transparent process for app review and app store ratings to give UK app developers the confidence to allow users to make purchases outside of app stores. According to the CMA, this has the potential to stimulate innovation and financial savings for developers.
