Apple has recently voiced concerns to the UK’s Competition and Markets Authority (CMA) over proposed regulatory measures aimed at increasing competition in the mobile browser market. The company argues that some of these remedy options would hinder its ability to innovate, potentially setting a dangerous precedent for tech companies and the digital economy at large.
This comes as the CMA investigates the duopoly of Apple and Google, who together dominate the mobile operating systems, app stores, and browser markets. Apple’s statement, submitted as part of the investigation into its Safari browser and mobile browsing policies, highlights the company’s stance on preserving its competitive edge in a market that it claims is crucial for its continued development of new technologies.
In its response to the CMA, Apple warned that any mandated access to its future WebKit (the underlying engine for Safari) or iOS features could lead to a significant decrease in its incentive to innovate. “Developing new features is a time and resource-intensive process,” Apple explained.
“If we are forced to provide access to these features for free, it would have a chilling effect on our ability to invest in future technology and could result in free-riding from third parties.” Essentially, Apple is arguing that if it were compelled to provide access to its proprietary technology without compensation, it would disrupt the business model that sustains its innovation pipeline.
The stakes are high. Apple’s mobile ecosystem, anchored by the iPhone and its Safari browser—has long been a hallmark of its success. Any action that disrupts its ability to charge for its advanced features, Apple warns, could reverberate through its entire product lineup, limiting the company’s future prospects for technological advancements.
The CMA’s investigation into Apple and Google’s control over mobile ecosystems has been underway since 2021, with the watchdog focusing on whether the companies are stifling competition. The regulator’s concerns are primarily focused on Apple’s tight control over its iOS ecosystem. In particular, the CMA is worried that Apple’s policies restrict competitors from delivering new and innovative features in the mobile browser market.
A key point of contention is Apple’s limitation on Progressive Web Apps (PWAs) on iOS. PWAs are a technology that allows developers to create app-like experiences on the web, eliminating the need to distribute apps through traditional app stores. Many smaller developers have expressed frustration with Apple’s restrictions, which prevent PWAs from reaching their full potential on iOS devices. The CMA has flagged this as a critical issue, arguing that it impacts both developers and consumers who are denied access to new features that could enhance their online experience.
The CMA also raised concerns over a longstanding revenue-sharing agreement between Apple and Google. This agreement, which ensures Google remains the default search engine on Safari and other Apple platforms, has led to a lack of competition in the mobile browser market.
With both companies benefiting from the agreement, the CMA argues that the incentives to improve or compete on features have been reduced, which could harm consumers in the long run.
In its response to the CMA, Apple rejected these claims, saying that its approach has helped maintain a secure and seamless user experience while ensuring the privacy of its customers. However, the CMA’s investigation suggests that these safeguards could also be contributing to a less competitive marketplace, which could limit consumer choice.
Apple’s stance on the proposed regulatory interventions
Apple has also expressed concerns that the proposed regulatory interventions could compromise user privacy and security. In its official statement, the company warned that requiring it to provide third parties with access to certain features could “undermine user privacy and security.” As an example, Apple pointed to the risks of exposing iOS features and WebKit to external parties who might not prioritize the same security standards.
“Privacy is one of the cornerstones of the Apple experience,” the company said. “Any intervention that compromises this could hurt consumers and damage the trust Apple has worked hard to build.” For Apple, it is clear that any regulatory action that could diminish its control over its mobile ecosystem poses a significant risk to the security and privacy that it claims set it apart from competitors.
The CMA’s investigation and the responses from Apple and Google is yet another layer of growing tension between the need for regulatory oversight and the protection of companies’ rights to innovate. Governments worldwide are grappling with how to balance these competing interests, especially as tech giants like Apple and Google continue to dominate the digital landscape.
As competition regulators worldwide begin to crack down on Big Tech, their decisions could reshape how mobile ecosystems function. In the UK, the CMA is set to implement its new regulatory powers under the Digital Markets, Competition, and Consumers Act, which is expected to come into force in January 2025.
This law will grant regulators the authority to impose new measures to increase competition in digital markets, particularly for companies like Apple and Google, which have long been accused of stifling innovation and manipulating the market.
However, critics argue that excessive regulation may have unintended consequences, leading to a stifling of innovation and a reduced incentive for companies to push the boundaries of technological advancement. This delicate balance between competition and innovation is one that will require careful thought as the CMA and other global regulators decide how to address the dominance of these two tech giants.
The investigation into mobile browsers and app stores is just one piece of the larger puzzle. Apple’s dominance in the mobile ecosystem has sparked concerns about how competition, or the lack thereof, affects innovation in the tech world. With the growing prominence of cloud-based gaming, the CMA also explored whether Apple’s policies are limiting the ability of companies to distribute these services via mobile app stores.
