The UK Competition and Markets Authority (CMA) has proposed designating Apple and Google as having “strategic market status”, a move that could oblige them to make changes to promote competition.

The CMA has been investigating the two companies since January in probes involving their app stores, browsers and mobile operating systems, and has now said they hold an “effective duopoly”.

Around 90 to 100 percent of UK mobile devices operate on the two companies’ mobile platforms, such as iOS and Android, the CMA said.

‘Duopoly’

Android holds about 61 percent market share in the UK, with Apple’s iOS holding about 38 percent, according to data from Kantar.

The strategic market status designation is given to large companies that have substantial and entrenched market power and a position of strategic significance with respect to digital activity in the UK.

The companies have been assigned similar “gatekeeper” status under the EU’s Digital Markets Act, and both face regulatory action in the bloc.

Under a law that came into force in the UK last year, companies designated as such can be forced to make changes to their activities to promote competition and increase consumer choice.

The companies have a month to make their cases to the CMA, before a final decision is handed down in October.

The CMA’s investigation has looked into whether there are barriers that could prevent competitors from offering competing products and services on the two companies’ mobile platforms, as well as whether the firms use their dominant positions to favour their own apps and services.

A third line of investigation has looked into whether Apple and Google require developers to sign up to unfair terms and conditions to distribute their apps on the companies’ app stores.

Concerns raised by consumers and businesses have included inconsistent and unpredictable app review processes and inconsistent app store search rankings that may favour Apple and Google’s own apps, the CMA said.

The regulator also called out the commissions of around 30 percent levied on many in-app purchases and restrictions preventing developers from telling users about other ways to pay or subscribe.

Commercial data

Developers also raised concerns that as part of Apple and Google’s review processes they could be forced to divulge commercially sensitive information, the CMA said.

The regulator said it wants app review processes to be carried out in a fair, objective and transparent manner, which could mean Apple and Google being made to offer explanations for delays or rejections, or creating an avenue for developers to raise concerns about the process.

The companies could also be forced to publish a methodology for how they rank apps in their app stores.

The CMA also said the companies could make it easier to transfer data between iOS and Android, making it easier to switch from one platform to another.

The CMA is still considering whether Apple should be forced to offer alternative app stores and to allow apps to be installed directly from developers’ online offerings. The EU is already trying to bring Apple into line with those requirements under the DMA.

CMA chief executive Sarah Cardell said the regulator’s proposals would “enable UK app developers to remain at the forefront of global innovation while ensuring UK consumers receive a world-class experience”.

‘Privacy and security’

Apple said the rules being considered would “undermine the privacy and security protections that our users have come to expect”, as well as hampering innovation and forcing it to give away its technology to competitors.

Google senior director of competition Oliver Bethell said it was “crucial that any new regulation is evidence-based, proportionate and does not become a roadblock to growth in the UK”.

Android, the Chrome browser and the Play app store offer “great choice, security and innovation” for users, he said.

Consumer rights group Which? said the dominance of Apple and Google was causing “real harm”.

“While these companies have driven innovation, their dominance is now causing real harm to consumers and to the businesses that depend on them,” said director of policy and advocacy Rocio Concha.