The United Kingdom's Competition and Markets Authority (CMA) has opened a formal investigation into Apple and Google, examining whether their mobile app store practices unfairly restrict developers from using alternative payment systems. The probe, announced on Tuesday, focuses on the two tech giants' control over in-app purchases and the mandatory use of their own payment processing systems, which typically charge commissions of 15% to 30%.
Scope of the Investigation
The CMA will assess whether Apple's App Store and Google's Play Store are stifling competition by preventing developers from directing users to cheaper payment options outside the app. This includes analyzing the impact on app prices and innovation. The watchdog has the power to impose fines of up to 10% of global turnover and enforce behavioral remedies if breaches are found.
CMA Chief Executive Sarah Cardell stated: 'We are concerned that Apple and Google are using their market power to restrict choice and increase costs for app developers and consumers. Our investigation will examine whether these practices are breaking the law.'
Developer and Consumer Impact
Many developers have long criticized the commission fees, arguing they inflate prices for consumers. For example, a developer earning $1 million annually from an app could lose up to $300,000 in fees. The investigation follows similar actions in the EU, where the Digital Markets Act has forced Apple to allow alternative payment systems, and in the US, where Epic Games' lawsuit led to a court order requiring Apple to permit external payment links.
According to a 2024 CMA report, UK consumers spent approximately £4.5 billion on app store purchases, with an estimated £1 billion going to Apple and Google in commissions. The probe could lead to mandatory changes, such as allowing developers to use third-party payment processors or display pricing information for alternative purchasing methods.
Broader Regulatory Context
The UK investigation is part of a global crackdown on big tech dominance. The CMA has already secured commitments from Apple to open its NFC chip for contactless payments and is reviewing Google's ad tech practices. If the regulator finds Apple and Google in violation, it could require them to revise their app store terms, potentially reshaping the digital economy.
Apple responded by stating its App Store 'has always been a safe and trusted place for users' and that it will 'constructively engage' with the CMA. Google said it will 'continue to work with the CMA to demonstrate how Android's openness benefits competition and consumers.'
Next Steps
The CMA has set a deadline of 12 months to complete the investigation. Stakeholders, including developers and consumer groups, are invited to submit evidence. The outcome could set a precedent for how app stores operate in the UK, influencing similar probes in other jurisdictions.
