The UK’s Competition and Markets Authority (CMA) is seeking to dismantle what it calls an “effective duopoly” held by Apple and Google over mobile app platforms by proposing that developers be allowed to guide users toward alternative payment methods outside of these companies’ app stores. This initiative comes in response to current policies that the CMA believes stifle competition, as they prevent app developers from offering more economical or varied purchasing options to consumers. Presently, Apple and Google impose commissions of up to 30% on certain in-app transactions.
Enabling developers to “steer” customers towards different payment choices could potentially empower developers and foster greater competition in the mobile app marketplace, where Apple and Google dominate the platforms used by the majority of smartphone users in the UK. Some companies, such as Spotify, have already sought to bypass app store fees by directing customers to make payments via their websites rather than through the app stores.
The CMA suggests that removing these barriers could expand options for both businesses and consumers. Additionally, the watchdog is evaluating whether Apple should be required to offer broader access to its near-field communication technology. This change could pave the way for developers to create alternative contactless payment solutions for iPhones.
However, Apple has raised concerns that these proposed changes might compromise user protections, including security features, privacy controls, and defenses against scams. Meanwhile, Google has noted that it has already implemented some modifications that permit developers to direct users to external payment methods.
This action by the CMA follows its recent classification of Apple and Google as possessing strategic market status, which provides the regulator with enhanced authority to impose specific regulatory requirements on their business practices.
