The UK Competition and Markets Authority (CMA) has concluded its ongoing antitrust proceedings relating to Google’s Play Store and Apple’s App Store as it plans to introduce the new competition regime for digital markets.
The CMA has not yet decided which digital activities or harms it will tackle first, but it expects its initial work under the new competition regime for digital markets to build on and leverage its experience in areas it has already investigated, such as mobile ecosystems, which include app stores.
The CMA has opened these proceedings because it is concerned that Google and Apple are using their market positions through the Play Store and App Store respectively to set terms that could be unfair to UK app developers and limit competition and consumer choice, potentially leading to higher prices and less choice for app users.
The cases concerned rules that require app developers offering digital content such as games to use Google Play or Apple’s billing systems for in-app purchases. The CMA believes that these rules limit developers’ choice of payment solution and make it difficult for them to engage directly with their customers.
This move comes as the CMA rejects commitments Google submitted in response to the CMA’s concerns. Google’s proposals would have given app developers the option to use alternative payment options to Google Play’s billing system, under the Developer-only Billing (DOB) and User Choice Billing (UCB) proposals.
After consulting with app developers and considering their feedback and the available evidence, the CMA is not convinced that the commitments proposed by Google effectively address the company’s competition concerns.
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 they would remain tied to the Google payment system. 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.
In light of recent developments, in particular the adoption 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.
Should Apple or Google be granted ‘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 issues raised by the parties more comprehensively than would 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 might be necessary following such a designation.
