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Microsoft is not the only one on the hot seat now, with the Competition and Markets Authority (CMA) investigating Apple and Google’s “effective duopoly on mobile ecosystems that allows them to exercise a stranglehold over operating systems, app stores and web browsers on mobile devices.” According to the UK’s regulator, the market investigation will look into the specific issues involving the two giants: their mobile browser market domination and Apple’s cloud gaming restriction on its App Store.
“Responses to the consultation, which have been published today, reveal substantial support for a fuller investigation into the way that Apple and Google dominate the mobile browser market and how Apple restricts cloud gaming through its App Store,” CMA explains in a press release. “Many of those came from browser vendors, web developers, and cloud gaming service providers who say that the status quo is harming their businesses, holding back innovation, and adding unnecessary costs.”
CMA explains that the immense powers of the two companies over their respective ecosystems affect the mobile distribution of specific products. Moreover, the regulator stresses that with the restrictions the two companies are implementing on specific cloud gaming services, the growth of the entire cloud gaming sector and UK customers are suffering.
“We want to make sure that UK consumers get the best new mobile data services, and that UK developers can invest in innovative new apps,” said Sarah Cardell, interim Chief Executive of the CMA. “Many UK businesses and web developers tell us they feel that they are being held back by restrictions set by Apple and Google. 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 where we can. We plan to investigate whether the concerns we have heard are justified and, if so, identify steps to improve competition and innovation in these sectors.”
Though not mentioned, Microsoft is significantly a part of this concern. While the company’s cloud gaming revenue hit $2.4 billion in 2022, its full potential is still limited in terms of its reach to Apple users since there is currently no dedicated Xbox Cloud Gaming app on Apple’s App Store. Instead, iOS users can only use the service via web browsers on their devices, but even with this option, Apple has its influence on Microsoft’s cloud gaming service. This is because of the Safari rendering engine that powers iOS browsers, meaning the performance of cloud gaming services of other companies is determined by Apple. Besides this issue, Microsoft also has to deal with Google’s API access restrictions and 30% in-app purchase tax, reportedly pushing the Redmond company to build its own mobile app and game store. Microsoft, then again, is not the only one concerned in this section. Other developers who have to design their creations based on the restrictions of Apple and Google are also affected.
“Web developers have complained that Apple’s restrictions, combined with suggested underinvestment in its browser technology, lead to added costs and frustration as they have to deal with bugs and glitches when building web pages, and have no choice but to create bespoke mobile apps when a website might be sufficient,” adds CMA. “Ultimately, these restrictions limit choice and may make it more difficult to bring innovative new apps to the hands of UK consumers.”
CMA shares how Apple and Google say in defense that the “restrictions are needed to protect users.” Despite this, the regulator says it will still consider whether there is a need to introduce new rules.
“Market investigations can result in changes to companies’ behaviour and restrictions, which improve competition and lead to greater choice for consumers and better-quality products,” CMA explains.