Apple has been designated with strategic market status (SMS) in the United Kingdom for iOS and iPadOS, a move that empowers regulators to impose binding requirements that could compel changes such as permitting rival app stores and direct software downloads.
The Competition and Markets Authority (CMA) confirmed the designation today in a press release, announcing that Apple and Google both met the legal tests for substantial and entrenched market power across operating systems, app distribution, browsers, and browser engines on smartphones and tablets. The CMA said the designation follows investigations opened in January under new powers granted by the Digital Markets, Competition and Consumers Act, which came into force in January.
According to the regulator, the designation does not in itself impose remedies but enables the CMA to initiate targeted interventions designed to open the platforms to greater competition. The CMA said its analysis and consultation with more than 150 stakeholders concluded that iOS and Android collectively account for 90–100% of UK mobile devices and that users rarely switch platforms once embedded. The CMA believes that developers seeking to reach UK users must pass through the companies' platform rules and distribution channels, giving the two firms a position of strategic significance.
The CMA said Apple and Google may be limiting innovation and competition through platform rules governing things like app reviews, in-app payments, storefront search ranking, browser distribution, and cross-platform switching. It also said emerging AI features are unlikely to erode the firms' market power within the five-year duration of the designation.
Apple told the BBC that users in the UK could lose access to new features, as has happened in the European Union, which the company attributes to heavy regulation. For example, some Apple Intelligence features which have rolled out in other parts of the world are not available in the EU.
The CMA added that the designation is not a finding of wrongdoing. The measure simply enables regulatory action that could include requirements for fairer and transparent ranking in app stores, allowing developers to steer users to outside payments, and changes to user-experience barriers when using non-default app stores or directly downloaded software.
The CMA noted in its press release that jurisdictions including the United States, EU, and Japan are adopting similar measures aimed at mobile platform gatekeepers.
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Article Link: Apple Could Be Forced to Open Up App Store in the UK
