UK ends Apple and Google app store scrutiny, but not for long

Apple and Google can take a moment to breathe, as the UK’s competition regulator has decided to end its investigation into their app stores — but not for long.

The UK Competition and Markets Authority (CMA) today confirmed it is closing its ongoing investigations into both Apple’s App Store and Google Play, but only because a much tougher set of regulations is about to come into effect.

Breathing space, but trouble’s coming

Passed into law in May, the UK’s Digital Markets, Competition, and Consumers Act (DMCCA) will give the CMA more powers and more flexibility in how its powers are applied. Principally, these powers include the ability to impose requirements on the conduct of firms in digital markets where those firms have been designated as having Strategic Market Status, and to impose significant fines against firms if those requirements are breached. The intention of these laws is similar to Europe’s Digital Markets Act (DMA).

The DMCCA sets up the Digital Markets Unit (DMU), a new regulatory body within the CMA that will police large technology companies.

Will Hayter, Executive Director for Digital Markets at the CMA, said: “Once the new pro-competition digital markets regime comes into force, we’ll be able to consider applying those new powers to concerns we have already identified through our existing work.”

In 2022, the regulator’s market study of the UK mobile ecosystem found that Apple and Google held an effective monopoly over app distribution in the UK. The CMA then commenced investigating both companies for alleged anti-competitive behavior, but the investigations took place within the framework of a previous set of laws that will be superseded by the DMCCA.

Concerning Apple, in a statement, the CMA said the closure of the investigations “should not be understood” to mean the concerns it was investigating had been resolved. “The decision does not affect any other action that the CMA may wish to take in relation to Apple’s conduct in this area in the future,” it said.

Commenting on the decision, Hayter added:

“It’s critical that tech businesses in the UK, including app developers, can have access to a fair and competitive app ecosystem, helping to grow the sector, boost investment and result in better outcomes for UK consumers. These are all factors we are considering before launching our first investigations under the new regime.”

The UK regulator now has more power

There are numerous new powers within the DMCCA.

Like Europe’s DMA, the law means some companies with a global turnover of more than £25b or UK turnover of £1b+ may be designated as having Strategic Market Status (SMS). 

Companies given such status will be required to follow requirements on their conduct imposed by the CMA, though the CMA does say it wants to build “productive relationships” with those firms. 

Perhaps so, but as a Linklaters legal blog explained earlier this year, “The scope of permitted conduct requirements is incredibly broad, giving the DMU very wide discretion to decide what obligations should be imposed on each firm.”

The CMA has previously said it expects the first companies to be designated as such will be revealed in July 2025, but this date may now slip a little in consequence of the recent UK election. 

Those requirements will allegedly be developed with the intention of opening up competition and consumer choice in digital markets. That likely extends to app stores and payment systems being opened up, as they are being in the EU under the DMA. The CMA can also impose big fines on companies that fail to comply.

It may be instructive to note that the CMA recently rejected commitments made by Google in response to its concerns.

Google had given app developers some additional flexibility in the use of alternative payment systems. Similar to those Apple has proposed in the EU, Google’s proposals included a commission and pop-up screens to warn users when they were about to use a third-party payment system. 

Open markets seem inevitable

While the CMA hasn’t yet said which companies may be investigated for possible SMS designation, it’s unlikely Apple, Google, or other Big Tech firms will be able to avoid it.

After all, the regulator does state that it “anticipates that its early work under the new digital markets competition regime will build on and leverage its experience in areas it has already studied, such as mobile ecosystems, which includes app stores.” (Italics mine.)

The latest UK news around tech regulation follows similar announcements in the EU, Japan, and South Korea and potential incoming investigations in Apple’s second biggest market, China.

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