New measures designed to bring down prices and spur UK tech innovation.
The CMA is consulting on new conduct requirements for Apple and Google under the UK digital markets competition regime. The proposed requirements would remove restrictions currently preventing UK app developers from 'steering' their customers away from Apple and Google's platforms for payment.
Steering requirements for Apple and Google
'Steering' - the ability for developers to engage with customers about off‑platform options - is currently banned by Apple and restricted by Google in the UK. Lifting these constraints would allow developers to bypass mandatory fees set by platforms.
The CMA's consultation includes principles to ensure that the fees Apple and Google charge for steering are fair and reasonable. Using an evidence-based framework, the CMA would expect steering fees to be lower than current app store charges, with savings passed onto UK customers or invested back into the developers' businesses to support future innovation.
Speaking today at the Informa Connect CompLaw conference, Will Hayter, Executive Director for Digital Markets, will say:
[On steering] We are consulting today on draft conduct requirements to support so-called 'steering', or the ability for app developers to engage directly with their users outside Apple and Google's app stores…
We think it is important to give both app developers and users more choice about how they communicate and how they transact. This is not only because choice is inherently valuable but also because we see this as the best way to introduce some competitive pressure in a vital part of the mobile ecosystem that is otherwise sorely lacking such pressure.
[On steering fees] While it is only fair for Apple and Google to be compensated for the services they provide, any fees they charge must be justified through a robust, evidence-led framework involving due reference to both cost and value.
Accessing contactless functionality on iOS
After hearing concerns from businesses that Apple's high fees and strict terms prevented access to near field communication (NFC) functionality, the CMA is designing a potential requirement to allow access for developers.
Unblocking the restriction would enable UK fintechs and developers to support contactless transactions, like card-based payments through digital wallets, from within their own iOS apps. Doing so would help unlock innovation and competition by supporting future payment methods - such as account-to-account, digital currency and stablecoin, as well as other non-financial uses, including digital ID and car keys.
The CMA is seeking views from developers on 2 design elements:
- The technical method by which NFC access should be provided
- The price charged for such access
Competition regime progress
Hayter's speech marks 18 months since the start of the UK's digital markets competition regime, during which time the CMA has concluded 3 strategic market status investigations and launched a fourth into Microsoft's business software ecosystem.
The CMA has so far imposed 3 conduct requirements for Google search and has secured immediate benefits through commitments offered by Apple and Google in relation to mobile. These commitments provide more certainty for UK developers on app distribution and to request interoperable access to functionality from Apple .
As Will will say later today:
In many cases, the market takes enough care of both companies and people - such is the power of competition to give people a choice of innovative products and services at reasonable prices, and to give companies with great ideas the chance to succeed.
But sometimes that simply doesn't work in practice. If companies don't do right by consumers, we may have to step in.
Adding:
… I do think that the Digital Markets, Competition and Consumers Act is an exceptionally well designed legislative tool to bring about positive change - it is precise enough to set boundaries, but flexible enough to respond to the realities of the market and to adapt over time as those realities shift.
