UK Regulators Designate Apple and Google as Having “Strategic Market Status” in Mobile Sector

UK Follows EU Lead in Big Tech Regulation

The UK’s Competition and Markets Authority has officially designated both Apple and Google as qualifying for regulation under its new digital markets framework, according to reports. This move potentially subjects the tech giants to significant fines and mirrors the European Union’s approach to regulating dominant digital platforms, though with different terminology.

UK Follows EU Lead in Big Tech Regulation
Strategic Market Status: The UK’s “Gatekeeper” Equivalent
Rationale Behind the Designation
Industry Response and Regulatory Implications
UK’s Delayed Regulatory Action

Sources indicate there was never serious doubt that the UK would emulate this aspect of Europe’s Digital Markets Act. The primary uncertainty surrounded what label the CMA would apply to major technology firms instead of the EU’s “gatekeeper” designation.

Strategic Market Status: The UK’s “Gatekeeper” Equivalent

As revealed earlier, the CMA has adopted the term “Strategic Market Status” (SMS) to describe companies subject to these regulations. According to the report, what remains unclear are the specific criteria that led to Apple and Google receiving this designation while excluding other major players like Amazon and Microsoft.

The CMA has now formally announced it has “today designated Apple and Google’s mobile platforms with strategic market status,” confirming earlier indications about the regulatory direction.

Rationale Behind the Designation

Analysts suggest the CMA reached its conclusion by observing that consumers predominantly use either Apple or Android devices, creating a duopoly in the mobile platform market. This situation forces businesses to develop for both platforms to reach all potential customers, giving Apple and Google significant market power.

Will Hayter, Executive Director for Digital Markets at the CMA, stated in an official release that “Apple and Google’s mobile platforms are used by thousands of businesses right across the economy to market and sell products and services to millions of customers,” but expressed concern that “the platforms’ rules may be limiting innovation and competition.”

The investigation reportedly benefited from input from over 150 unspecified stakeholders and included “constructive engagement with Apple and Google” during the assessment process.

Industry Response and Regulatory Implications

Ahead of the official announcement, Apple reportedly criticized the CMA’s approach, claiming it “undermines the privacy and security protections our users have come to expect, hampers our ability to innovate, and forces us to give away our technology for free to foreign competitors.”

The CMA emphasizes that the SMS designation “is not a finding of wrongdoing” and that no immediate changes will result from the classification. However, the designation does bring the companies under UK legislation that will enable the CMA “to consider proportionate, targeted interventions” – a phrase that analysts suggest serves as a synonym for potential future fines.

UK’s Delayed Regulatory Action

This latest announcement, which emphasizes that nothing changes immediately, continues a pattern of delayed regulatory action against big tech in the UK. According to reports, in early 2024, the authority promised to immediately launch multiple investigations into big tech companies, though the actions didn’t materialize as quickly as suggested.

This delay occurred because the CMA lacked the necessary authority at that time to conduct such investigations. Its limited powers faced legal challenges, including from Apple, and when it announced its immediate investigations, the authority was still months away from obtaining full regulatory authority.

The UK government has repeatedly identified big tech regulation as a priority but has struggled to follow through consistently. The country proposed a Digital Markets Unit in 2020, two years before the EU’s Digital Markets Act became law, but only launched the unit a year later with 60 staff members and no actual powers until 2023.

Despite being geographically part of Europe, the UK’s Brexit decision means it operates independently from EU regulations, allowing it to develop its own approach to digital market regulation while still drawing inspiration from European models.