A U.K. competition authority investigation of Apple and Google’s mobile browsers has concluded that the mobile duopoly’s policies are “holding back innovation” and could also be limiting economic growth.
“Mobile browsers are apps which provide the primary gateway for consumers to access the web on their mobile devices, and hence for businesses to reach them with their content and products. The issues we have identified mean that consumers could be missing out on new features when using mobile browsers; and businesses are limited in their ability to reach consumers through browser apps,” runs a summary of the 611-page final decision report published on Wednesday.
Most of the concerns identified relate to “Apple’s policies that determine how mobile browsers, the way we access the web on mobiles, work on Apple’s devices,” per a press release.
These include issues such as Apple mandating the use of its WebKit browser engine for other browsers on iOS, which limits their ability to differentiate versus Apple’s own Safari browser by offering enhanced features; Safari having greater or earlier access to key platform features vs rival browsers, which the inquiry groups believes is crimping competition (including around privacy features), and holding back development of PWAs (progressive web apps) on iOS; limits on in-browsing which puts limits on rival browsers’ ability to serve app users who click on a link out to the web; and certain choice architecture issues.
When it comes to Google, the investigating inquiry group’s concerns center on revenue sharing arrangements between Mountain View and Apple, whereby Google pays Apple a significant share of the search ad revenue earned from traffic on Safari and Chrome on iOS.
“We have found that Apple and Google earn significant revenue when their key rival’s mobile browser is used on iOS for web searches on Google, significantly reducing their financial incentives to compete,” they observe, going on to note that the extent of the revenue-sharing is “so large” as to significantly limit the financial incentive to compete.
But still no enforcement in sight
Despite this raft of negative findings — and despite U.K. competition concerns over Apple and Google’s grip on mobile dating back many years at this point — there’s still no competition enforcement action in sight; the report recommends waiting for special abuse control powers to kick in.
These are powers that would be unlocked if an active investigation of the two tech giants (opened in January) confirms they fall in-scope of beefed up antitrust powers wielded by the Competition and Markets Authority (CMA) since a major U.K. reform of competition law targeting digital giants came into force in January. So remedies for the anti-competitive issues identified remain up in the air.
The report advises against trying to remedy the competition concerns using standard market investigation powers — as it says there are “a number significant risks to the effectiveness of these measures.”
Cloud gaming, which had also formed part of the market investigation, was dropped from the inquiry last November after some changes by Apple that the regulator deemed likely to alleviate competition concerns.
The report by the independent inquiry group, which was set up by the CMA when it opened a market investigation into Apple and Google’s grip on mobile back in November 2022, follows similar preliminary conclusions last fall. But the inquiry group now says it is no longer concerned about some specific choice screen issues it had previously raised.
It said an update by Apple in December making changes to how iOS users can switch their default browser resolved concerns it had had on that platform. While Google provided the inquiry group with “new evidence relating to its use of prompts to encourage users to set Chrome as their default browser on Android” that also resolved its concerns.
At the same time, the inquiry group still took issue with some other screen architecture design choices that they said could be making it harder for users to switch to alternative mobile browsers versus Apple’s Safari and Google’s Chrome native browsers.
Future remedies?
The final report suggests a range of potential remedies (or “appropriate interventions,” as it terms them) for the mobile browser competition concerns, which are set out in full in Appendix D.
Suggested remedies include requiring Apple to allow the use of alternative browser engines and an interoperability requirement that would mandate equivalent access to iOS features for rival browsers, as well as a ban on the Chrome revenue share, among others.
Additionally, how Google displays browser choice screens could be regulated under this approach, including the frequency of default browser pop-ups.
While none of the proposed remedies is being taken forward as part of this CMA market investigation, they could offer a steer of how the regulator might ultimately enforce on Apple and Google’s mobile duopoly.
That’s assuming its Digital Markets Unit’s investigation determines they have so-called Strategic Market Status (SMS), meaning they would fall under the special abuse control regime and could be subject to such bespoke interventions. The SMS investigations on Apple and Google are expected to conclude later this year.
Commenting in a statement, Margot Daly, chair of the CMA’s independent inquiry group, wrote:
“The analysis set out in our report and the range of potential interventions considered to address the market issues we have identified merits consideration by the CMA under its new powers, which have been specifically designed for digital markets. So, I welcome the CMA’s prompt action to open strategic market status investigations into both Apple and Google’s mobile ecosystems. The extensive analysis we’ve set out today will help that work as it progresses.”
Apple and Google were contacted for comment on the inquiry group’s final report.
Here’s Apple’s statement:
“Apple believes in thriving and dynamic markets where innovation can flourish. We face competition in every segment and jurisdiction where we operate, and our focus is always the trust of our users. We have concerns with this report and believe the remedies it discusses would undermine privacy, security, and the overall user experience. We will continue to engage constructively with the CMA to best address their concerns.”
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