Apple, Google Probed by UK Over ‘Stranglehold’ on Mobile Devices

Katharine Gemmell, Bloomberg News

, Photographer: Bloomberg/Bloomberg

(Bloomberg) -- Alphabet Inc. and Apple Inc. face an in-depth probe from Britain’s antitrust watchdog after a study concluded they have the power to “exercise a stranglehold” over operating systems, app stores and web browsers on mobile devices.

The Competition and Markets Authority said Tuesday it’s opening a formal investigation into the duo’s dominance of the mobile browser market as well as potential curbs on the distribution of cloud gaming services through Apple’s App Store.

The CMA’s escalation follows hard-hitting findings of a 356-page report into competition for mobile operating systems and apps, which concluded that Google and Apple had an effective duopoly and played a “gatekeeper role.” Responses to the study found support for a deeper review of the way Apple and Google dominate mobile browser market and how Apple restricts cloud gaming through its App Store.

“Many UK businesses and web developers tell us they feel that they are being held back by restrictions set by Apple and Google,” Sarah Cardell, the CMA’s interim chief executive officer, said in a statement on Tuesday.

The CMA is currently waiting for the government to pass legislation which gives its new Digital Markets Unit the power to enforce more types of intervention. In his Autumn statement last week, UK Chancellor Jeremy Hunt said the government would be pushing this through as soon possible, following delays in getting it over the line.

“When the new Digital Markets regime is in place, it’s likely to address these sorts of issues. In the meantime, we are using our existing powers to tackle problems,” Cardell said.

Apple said it will “continue to engage constructively” with the CMA “to explain how our approach promotes competition and choice, while ensuring consumers’ privacy and security are always protected.”

Google said that its Android operating system “gives people a greater choice of apps and app stores than any other mobile platform” and enables developers “to choose the browser engine they want, and has been the launchpad for millions of apps.”

Market investigations can take as long as 12 months and can lead to imposing strict remedies like restrictions or changes to companies behavior.