The UK’s antitrust watchdog has moved to deepen its scrutiny of the Apple and Google mobile duopoly — kicking off an in-depth investigation into elements of the pair’s mobile ecosystem dominance by probing their approach toward rival mobile browsers and cloud gaming services which it’s concerned could be restricting competition and harming consumers.

At the same time, the CMA proposed to undertake what’s known as a market investigation reference (MIR) with two points of focus: One looking at Apple’s and Google’s market power in mobile browsers; and another probing Apple’s restrictions on cloud gaming through its App Store.

That proposal for an MIR kicked off a standard consultation process, with the regulator seeking feedback on the scope of its proposed probe, and today it’s confirmed the decision to make a market investigation — opening what’s referred to as a ‘Phase 2’ (in-depth) investigation which could take up to 18 months to complete.

The probe will focus on the supply of mobile browsers and browser engines; and the distribution of cloud gaming services through app stores on mobile devices, the CMA said today.

Its PR emphasizes the strategic importance of mobile browsers — noting that “most” people use a mobile browser at least daily to access online content, and adding that 97% of all mobile web browsing in the UK last year occurred on browsers powered by either Apple’s or Google’s browser engine — giving the pair huge power over users’ experiences.

On cloud gaming services, the regulator is concerned restrictions applied via mobile platforms could hamper growth of the developing sector, leading to UK gamers to “miss out”, as it puts it.

“Web developers have complained that Apple’s restrictions, combined with suggested underinvestment in its browser technology, lead to added costs and frustration as they have to deal with bugs and glitches when building web pages, and have no choice but to create bespoke mobile apps when a website might be sufficient,” it also wrote in the press release.

“Ultimately, these restrictions limit choice and may make it more difficult to bring innovative new apps to the hands of UK consumers. At the same time, Apple and Google have argued that restrictions are needed to protect users. The CMA’s market investigation will consider these concerns and consider whether new rules are needed to drive better outcomes.”

Commenting in a statement, Sarah Cardell, interim chief executive of the CMA, added:

“We want to make sure that UK consumers get the best new mobile data services, and that UK developers can invest in innovative new apps.

Many UK businesses and web developers tell us they feel that they are being held back by restrictions set by Apple and Google. When the new Digital Markets regime is in place, it’s likely to address these sorts of issues. In the meantime, we are using our existing powers to tackle problems where we can. We plan to investigate whether the concerns we have heard are justified and, if so, identify steps to improve competition and innovation in these sectors.”

If, during the course of the investigation, the CMA identifies features with an “adverse effect on competition” it can impose corrective remedies directly on the companies — and may also make recommendations to other public bodies (like sectoral regulators or the government) if it sees a need for new legislation to counteract damaging activities.

On cloud gaming, it also denies any anti-competitive behavior — claiming it does not prevent cloud gaming apps from appearing on the App Store, and further asserting it is not trying to block the emergence of cloud gaming apps, while again playing up a claimed concern for consumer protection.

“Apple’s approach provides users with a valuable choice, centred on security, privacy and performance, between ecosystems,” the iPhone maker also writes in the response, emphasizing a claim that its approach to security and privacy “offers consumers a clear alternative to the Android system, providing them with a real choice across these key parameters of competition”; and further warning: “The potential remedies under contemplation by the CMA risk removing this choice and thus actively restricting competition at an ecosystem level. Any action that would result in such a loss of consumer choice and competition should be avoided.”

It also argues that the main issues identified by the CMA at that stage are not found on its mobile ecosystem — further suggesting restrictive behaviors the regulator is most concerned about apply to Apple’s iOS, not Android, and thereby seeking to divert regulatory scrutiny onto its rival.

Offering an overview of responses to the consultation, the CMA said it received 31 (out of 43) that were supportive of going ahead (with a further 6 supportive while pushing for a broader scope); and just 5 against — with Apple offering what it couched as the strongest opposition.

Responses in favor included 22 web developers and software engineers, several browser vendors, as well as individuals and advocacy groups, it added, specifying that “most were critical of Apple’s restrictions in these areas”.

“While we understand the rationale presented by some stakeholders to expand the scope into additional areas including for example desktop devices and general search, we have chosen to retain the scope described above,” the CMA goes on in a note on the scope of the MIR. “This is on the basis that a targeted investigation will be more manageable to deliver results in a timely manner. However, we are mindful of the links between browsers and search services, both from user experience and financial perspectives, which we will take into account when assessing competition in the supply of mobile browsers and potential remedies.”

“With respect to cloud gaming, the focus of this investigation will be solely in relation to the access that such services have to app stores on mobile devices. As such, the investigation will not look more broadly at the market for cloud gaming services or the strength of competition between suppliers of cloud gaming or competition in gaming more generally,” it also specifies.

Apple and Google were contacted for a response to the CMA’s newest investigation of their business activity.

An Apple spokesperson sent us this statement:

“Apple believes in vibrant and competitive markets where innovation can thrive. Through the App Store, we’ve helped millions of developers turn their brightest ideas into apps that change the world, spurring an app economy that supports hundreds of thousands of jobs in the UK alone. We will continue to engage constructively with the Competition and Markets Authority to explain how our approach promotes competition and choice, while ensuring consumers’ privacy and security are always protected.”

A Google spokesperson also provided a statement:

“Android gives people a greater choice of apps and app stores than any other mobile platform.  It also enables developers to choose the browser engine they want, and has been the launchpad for millions of apps.  We’re committed to building thriving, open platforms that empower consumers and  help developers build successful businesses.”

So the regulator has a growing suite of investigations and other activity focused on addressing the market power of Apple and Google — with what looks like more interventions coming down the pipe for their mobile ecosystems.

UK confirms antitrust probe of Android-iOS ‘mobile duopoly’ focused on browsers and cloud gaming by Natasha Lomas originally published on TechCrunch

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