The United Kingdom’s Competition and Markets Authority (CMA) has announced the closure of its ongoing investigations into Google’s Play Store and Apple’s App Store, citing the upcoming implementation of the new Digital Markets, Competition and Consumers Act (DMCCA) as the reason. The CMA had previously extended its timeline for reviewing the practices of both tech giants, particularly concerning the distribution of apps on their respective platforms. This move signals a shift in the regulator’s approach, as it prepares to wield broader powers under the new digital markets regime.
Initial Concerns Over App Store Billing Practices
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The CMA’s investigations initially centered on the billing systems mandated by Google and Apple for in-app purchases on their platforms. App developers were required to use Google Play’s or Apple’s own billing systems, which the CMA believed limited the developers’ choice of payment solutions and hampered their ability to interact directly with customers. The regulator was particularly concerned that these practices stifled competition by making it difficult for developers to offer alternative payment options, potentially leading to higher costs for consumers and less innovation in the app market.
In response to the CMA’s concerns, Google proposed several commitments aimed at addressing the issue. These proposals included Developer-only Billing (DOB) and User Choice Billing (UCB), which would have allowed app developers to use alternative payment methods instead of being restricted to Google Play’s billing system. However, after consulting with app developers and reviewing the evidence, the CMA concluded that Google’s proposals were insufficient to resolve the competition concerns effectively.
CMA’s Strategic Shift in Light of the DMCCA
With the passing of the DMCCA in May, the CMA reassessed its ongoing investigations into Google and Apple’s app store practices. The agency decided to close these cases, recognizing that the new pro-competition digital markets regime would provide more comprehensive tools to address the concerns identified in its earlier probes.
Will Hayter, Executive Director for Digital Markets at the CMA, emphasized the importance of the new legislation, stating, “Once the new pro-competition digital markets regime comes into force, we’ll be able to consider applying those new powers to concerns we have already identified through our existing work.” He also highlighted that if Google or Apple are designated as having “strategic market status” in connection with any digital activities, the CMA will have the authority to examine these issues more holistically and potentially implement necessary interventions.
Implications for the Future
The CMA’s decision to close the cases reflects a broader anticipation of the enhanced regulatory framework under the DMCCA. This legislation will likely empower the CMA to tackle competition concerns more effectively, potentially leading to significant changes in how digital markets operate in the UK. The outcome of these investigations and any future interventions will be closely watched by industry stakeholders, as they may set new precedents for the regulation of dominant tech companies.
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