UK regulator confirms new rules coming for Apple and Google

The Competition and Markets Authority (CMA) is consulting on new conduct requirements for Apple and Google covering how apps steer users to payment options outside their app stores, with rules on iPhone tap-to-pay access and Google search choice screens to follow.

Will Hayter, Executive Director for Digital Markets at the CMA, set out the position in a speech at Time to Reset, an event hosted by the News Media Association and Reset alongside the Financial Times.

The regulator already has three formal conduct requirements in place on Google in search, including the publisher conduct requirement it introduced in early June.

“We’re consulting on parallel conduct requirements on Apple and Google in mobile steering. There’s more to come, starting with NFC chip access on iOS and user choice screens in search,” said Hayter.

The NFC requirement would open the iPhone’s near-field communication chip to third parties, allowing fintechs to offer their own tap-to-pay services in competition with Apple Pay.

Hayter said the phased plan followed the search and mobile roadmaps the CMA published last summer, and that the regulator was doing what it had said it would do.

Commitments already in force

Apple and Google agreed commitments with the CMA on app store review, app ranking and data use, along with an interoperability process for Apple, which all came into force on 1 April.

Developers have started using the interoperability process, and Apple will publish its first annual interoperability transparency report by the end of September.

The CMA also expects the first set of compliance data from Apple and Google by the end of the month.

Hayter said commitments were the quickest route to progress on relatively well understood issues early in the regime, but warned firms not to expect the same approach everywhere.

“As the regime beds in, the issues are likely to get trickier, so you should not expect us to take the same view on commitments everywhere,” he said.

The fight over app store fees

Responses to the two draft mobile steering conduct requirements show Apple and Google on one side and many developers on the other, particularly on how any fee should be set.

The platforms argue fees must be based on the value they provide, while developers say value is meaningless and open to abuse, and that any fee at all should be cost-based.

A separate dispute is running over the Google search choice screen, where some respondents want AI assistants included as options and others say assistants do not deliver what users expect from a search engine.

“As we come to final positions on these, one way or another we should expect disagreement with where we end up,” said Hayter.

Microsoft and the cloud providers

The CMA is running a voluntary process with Amazon and Microsoft on cloud, which Hayter said had already produced concrete changes to improve interoperability and multi-cloud, with more expected.

A formal strategic market status (SMS) investigation into Microsoft’s business software ecosystem is also under way, and the CMA is considering cloud licensing as part of it.

Hayter said a designation would allow the regulator to address concerns that Microsoft’s licensing practices undermine customer choice of cloud services, and to intervene as AI becomes embedded in business software.

He described cloud and AI-enabled business software as areas where competition and sovereignty intersect, saying high concentration and lock-in created strategic dependencies for UK businesses and the public sector.

The CMA has been advising the government on this as part of wider work on public procurement, with an announcement expected in Parliament.

IPPR report and the government steer

The speech responded to a report from the Institute for Public Policy Research (IPPR), titled Bottleneck Britain, which called for a new strategic steer to the CMA and included polling of UK companies.

Hayter said the polling showed companies were more concerned about the market power of large digital platforms than about access to finance or talent.

He said a new steer was a question for the government, which had responded to the report by saying it continued to back the CMA to use all its tools as robustly as necessary.

The current steer asks the CMA to be swift, predictable, independent and proportionate, and to use the digital regime independently, flexibly, proportionately and collaboratively.

Hayter said the conduct requirements were designed to deliver for a range of UK groups, including:

• Publishers seeking a fairer negotiation with Google over how their content appears in search
• App developers wanting fair distribution and fintechs wanting NFC access for tap-to-pay
• UK companies and public bodies buying business software and cloud services
• Consumers, who he said ultimately pay for every digital product through advertising, app store commission and cloud costs

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