The UK’s competition regulator is preparing to loosen Apple and Google’s hold over the mobile economy, proposing rules that would let app developers point customers towards cheaper ways to pay outside the two companies’ app stores.
The Competition and Markets Authority (CMA) argues that consumers and the businesses that build apps are being short-changed by restrictions stopping people from spending money outside Apple’s App Store and Google’s Play Store. With at least 90 per cent of UK mobile devices running on one of the two platforms, the regulator has branded the pair an “effective duopoly”, a description it has used repeatedly as it ramps up scrutiny of the sector.
At the heart of the proposals is “steering”, the practice of letting an app guide users to a website where they can subscribe or buy directly, sidestepping the platforms entirely. The CMA is consulting on lifting the curbs that currently block this, a change it says would let apps bypass the “mandatory fees” the two companies impose. Both Apple and Google charge commission of up to 30 per cent on purchases made inside apps, including subscriptions, a levy that has long irritated developers and the focus of the regulator’s proposed action to drive more competition on mobile platforms.
The restrictions have real consequences for how people use everyday apps. Spotify, for instance, does not let UK users buy a monthly subscription through the Apple App Store, because it does not want to absorb the fees and pass them on to customers. Would-be subscribers must instead sign up via the desktop website, an awkward workaround that the CMA believes typifies a market lacking competitive pressure.
Will Hayter, executive director at the CMA, said it was important to give apps and their users more choice over how they transact and communicate. “This is not only because choice is inherently valuable but also because we see this as the best way to introduce some competitive pressure in a vital part of the mobile ecosystem that is otherwise sorely lacking such pressure,” he said.
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