Apple and Google have been criticised for “exercising a ‘vice-like grip’ over mobile devices” by the UK’s competition watchdog.
More than 99% of all phones sold in the UK run on either iOS, owned by Apple, or Android, owned by Google – meaning these two companies can “tilt the playing field towards their own services”.
An interim report into the companies published by the Competition and Markets Authority on Tuesday said the watchdog was “concerned that this is leading to less competition and meaningful choice for customers”.
The CMA has advocated that the issue be tackled through the new Digital Markets Unit when it receives powers from the government.
Both companies’ control over the mobile market has been criticised by regulators and other enterprises in the US, EU, and UK.
Apple and Google have repeatedly been accused of using this control to serve their own interests before those of their customers, although the companies dispute this allegation.
Google is currently appealing against a €4.34bn (£3.71bn) record fine from the European Commission, alongside an order to stop abusing its control of the Android operating system, over allegedly forcing phone makers to pre-install its apps.
Fortnite-maker Epic Games accused Apple of “kneecapping the competition” after it was banned from the App Store for avoiding its payment rules.
The CMA launched its investigation earlier this year and has now “provisionally found that Apple and Google have been able to leverage their market power to create largely self-contained ecosystems”.
“As a result, it is extremely difficult for any other firm to enter and compete meaningfully with a new system,” the watchdog reported.
Andrea Coscelli, the CMA’s chief executive, said: “Apple and Google have developed a vice-like grip over how we use mobile phones and we’re concerned that it’s causing millions of people across the UK to lose out.
“Most people know that Apple and Google are the main players when it comes to choosing a phone.
“But it can be easy to forget that they set all the rules too – from determining which apps are available on their app stores, to making it difficult for us to switch to alternative browsers on our phones.”
“This control can limit innovation and choice, and lead to higher prices – none of which is good news for users,” Mr Coscelli warned.
“Any intervention must tackle the firms’ substantial market power across the key areas of operating systems, app stores and browsers,” he added.
“We think that the best way to do this is through the Digital Markets Unit when it receives powers from government.”
A spokesperson for Apple said: “Apple believes in thriving and dynamic markets where innovation can flourish.
“We face intense competition in every segment in which we operate, and our North Star is always the trust of our users. We will continue to create new opportunities for developers while protecting our user’s privacy and security.”
“Our rules and guidelines are constantly evolving, and we have made many recent changes that benefit developers and consumers alike.
“We will continue to engage constructively with the UK Competition and Markets Authority as their work on this study progresses,” the company added.
A spokesperson for Google said: “Android provides people with more choice than any other mobile platform in deciding which apps and app stores they use.
“The Android app ecosystem also supports nearly a quarter of a million jobs across thousands of app developer and phone maker businesses in the UK.
“At Google we regularly review how we can best support these businesses – for example – as a result of recent changes, 99% of developers qualify for a service fee of 15% or less
“We’re committed to building thriving, open platforms that empower consumers and help developers succeed,” they added.