Apple and Google can breathe a sigh of relief after the UK competition authority announced on Wednesday that it was closing two investigations into their respective mobile app ecosystems, citing administrative priorities.

Since March 2021, the UK regulator has been investigating Apple’s conduct in relation to the distribution of apps on its iOS and iPadOS mobile devices, with a particular focus on the terms of developers’ access to the App Store. Since June 2022, a similar investigation has also been examining Google’s conduct in relation to the distribution of apps on Android devices, including the Play Store rules for its own billing system for in-app purchases. The CMA had said it was concerned that the two companies’ terms and conditions could unfairly limit developers’ choices.

The Competition and Markets Authority (CMA) had also previously identified significant reasons for concern about the duopoly of the two mobile phone providers.

However, both investigations have now been discontinued without any action being taken.

But Apple and Google’s relief from this regulatory reprieve is likely to be short-lived, as the CMA has cited the expectation of being able to use new competition powers that will allow it to impose special abuse controls against technology giants with strategic market power as the main reason for closing the investigations.

In a press release, the CMA said it would rely on future regulation of digital markets to “address concerns about app stores.”

The company also wrote that it expects to “build its initial work under the new competition rules for digital markets on and leverage its experience in areas already studied, such as mobile ecosystems, which include app stores” – sending the clearest signal yet that Apple and Google will be the first to be affected by special abuse controls.

Will Hayter, executive director for digital markets at the CMA, added in a statement: “Once the new pro-competitive digital markets regime comes into force, we may consider applying these new powers to concerns we have already identified through our existing work.

“It is vital that technology companies in the UK, including app developers, have access to a fair and competitive app ecosystem that will help grow the sector, drive investment and lead to better outcomes for UK consumers. These are all factors we are considering before launching our first investigations under the new regime.”

The redesign of the UK digital market regime has been in the works for years. It was given the green light in November 2020, but there have been legislative delays due to the political turmoil resulting from successive Conservative governments in recent years.

The plan was finally revived in April last year, with the Digital Markets Competition and Consumer Protection Bill fast-tracked through Parliament ahead of the May 2024 general election. This means the CMA is finally ready to take on the big tech companies with the power it needs once the regime comes into force (which it expects “later this year”).

“In light of recent developments, in particular the passing of the Digital Markets, Competition and Consumers Act (DMCCA) in May, the CMA has assessed its ongoing competition investigation into Google’s Play Store and its parallel proceedings into Apple’s App Store rules against its administrative priorities and has decided to close these cases at this point,” the CMA wrote.

“If Apple or Google are classified as having ‘strategic market status’ in relation to digital activities in the mobile sector, the CMA will be able to use its new powers to examine the range of issues raised by the parties more comprehensively than would otherwise be possible in the context of these specific investigations under the Competition Act. This will also enable the CMA to consider whether and what interventions may be necessary following a classification.”

However, UK developers hoping for swift action from the regulator to restart the Apple-Google duopoly will have to wait even longer. The DMCCA requires the CMA to conduct investigations to determine whether a tech giant’s market power meets the legal requirement of “strategic market status” (SMS) – and, if so, to classify it as subject to the regime.

In January, the CMA said it expected to conduct three to four SMS investigations in the first year of the regime’s operation, so it could be quite some time before a crackdown on Britain’s Big Tech companies can take place.

One sign that the reboot may bring tighter operating conditions for platform operators is the fact that the CMA rejected commitments submitted by Google in response to concerns about the Play Store terms as part of its (now closed) investigation. Had the CMA accepted the commitments, it could have limited the scope of remedies it could otherwise impose on Google under the digital markets regime, assuming (as is highly likely) that Google ends up being classified as a provider of SMS.

The CMA said Google’s proposals would have given app developers the option to use alternative payment options to Play’s billing system, under the “Developer-only Billing” and “User Choice Billing” proposals. However, after consulting with developers and reviewing feedback and available evidence, the CMA said it was not convinced that Google’s proposed commitments effectively addressed its competition concerns – and so rejected them.

“Feedback from app developers indicated that Google’s proposals to allow app developers to use alternative payment methods for in-app payments did not go far enough and in practice left them tied to the Google payments system,” the report said. “In particular, app developers pointed to the amount of commission they would continue to pay to Google and the proposed ‘pop-up screens’ that could prevent users from completing a transaction.”

It will be interesting to see how the CMA shapes future interventions into specific tech giants, as the DMCCA gives the regulator scope for bespoke interventions tailored to the specific platform and identified issues. This sets the UK approach apart from the more prescriptive restart of competition, the Digital Markets Act (DMA), already in force in the European Union.

However, the DMA’s fixed list of dos and don’ts has applied to Apple and Google since early March, when the EU’s regulation of certain gatekeepers came into force, leaving the UK far behind the bloc when it comes to tackling the power of the platforms.