CMA: MBCG MI Provisional Decision Report

FOR IMMEDIATE RELEASE - 22 NOVEMBER 2024

CMA publishes provisional findings in Mobile Browser and Cloud Gaming Market Investigation

Findings by an independent inquiry group suggest Apple's policies are holding back innovation in the browsers we use to access the web on mobile phones.

·    report provisionally recommends that the CMA board consider investigating Apple and Google's mobile ecosystem activities using new digital markets powers

·    proposes that no further action to be taken on cloud gaming given primary concerns have been addressed

The Competition and Markets Authority's (CMA) independent inquiry group has carried out an in-depth assessment of the mobile browser markets and has provisionally concluded that they are not working well for UK businesses and millions of phone users. Most concerns that have been identified relate to Apple's policies that determine how mobile browsers, which are the way we access the web on mobiles, work on Apple's devices.

The CMA opened its investigation following its Mobile Ecosystems Market Study in 2021, which found that Apple and Google have an effective duopoly on mobile ecosystems, including operating systems, app stores and web browsers on mobile devices. This puts Apple and Google in a position to set the rules on how mobile browsers can work on iOS and Android devices respectively.

The group has provisionally found that Apple's rules restrict other competitors from being able to deliver new, innovative features that could benefit consumers. Other browser providers have highlighted concerns that they have been unable to offer a full range of browser features, such as faster webpage loading on iPhone. Many smaller UK app developers also told us that they would like to use progressive web apps - an alternative way for businesses to provide apps to mobile users without downloading apps through an app store - but this technology is not able to fully take off on iOS devices. In addition, the group has provisionally found that a revenue-sharing agreement between Google and Apple significantly reduces their financial incentives to compete in mobile browsers on iOS.

Other issues considered in the report include the way that users are presented with choices about which browser they use. The group has provisionally found that Apple and Google can manipulate these choices to make their own browsers the clearest or easiest option.

The investigation has also looked at mobile cloud gaming, with around 175,000 gamers in the UK choosing cloud services that stream games directly to their phone. The group looked into concerns over how cloud gaming apps are distributed through app stores, with the primary concern being that Apple did not allow cloud gaming apps to be available on the App Store at all. During the course of the investigation, Apple has made changes which allow cloud gaming apps to be sold via the App Store and we have seen some evidence of such apps emerging. Given that the primary underlying concern has fallen away, the group has provisionally concluded there is no need for intervention by the CMA in mobile cloud gaming.

The group has provisionally decided that an effective and comprehensive means of addressing its provisional findings is to recommend that the CMA board prioritises investigating Apple's and Google's activities in mobile ecosystems under new digital markets competition rules coming into force next year. The Digital Markets, Competition and Consumers Act will give the CMA the ability to designate firms as having Strategic Market Status (SMS) in relation to a digital activity and impose appropriate interventions. In order to designate a firm as having SMS, the CMA must undertake a formal investigation.

Should any such SMS investigations result in designations and appropriate interventions, the recommended course of action would improve competitive conditions in these markets, allowing a wider range of companies to invest, innovate and grow, giving millions of consumers access to mobile browsers which may be faster and more secure for use in their everyday lives.

Margot Daly, chair of the CMA's independent inquiry group, said:

"Markets work best when rival businesses are able to develop and bring innovative options to consumers. Through our investigation, we have provisionally found that competition between different mobile browsers is not working well and this is holding back innovation in the UK.

"The analysis set out in this report and a range of potential interventions considered to address the market issues identified by the Group merits consideration by the CMA board under its new powers, which have been specifically designed for digital markets. Under those new powers, the CMA can consider the case for designating firms with strategic market status, taking account of the interplay between the specific markets that are the subject of this market investigation and Apple's and Google's wider mobile ecosystems."

The CMA is inviting comments by 13 December on its provisional findings and expects to make a final decision in March 2025.

For more information, visit the Mobile Browsers and Cloud Gaming market investigation case page.

Notes to editors

1.   The Digital Markets, Competition and Consumers Act - which received royal assent in May 2024 - grants new responsibilities to the CMA to promote competition in digital markets through the new, forward-looking digital markets competition regime. The new regime is expected to come into force in January 2025.

2.   Under the new regime the CMA can - if warranted - impose legally binding conduct requirements (CRs) or pro-competition interventions (PCIs) on firms in relation to the digital activity for which they have been designated.

3.   Other competition agencies considering mobile browsers include the European Commission and the United States Department of Justice.

4.   For media enquiries, contact the CMA press office on 020 3738 6460 or press@cma.gov.uk.