Conduct rules are coming for Google and Apple in the UK

Apple and Google face new rules governing how they run their smartphone software and app stores in the UK, as Britain’s antitrust agency looks to impose new European-style controls on the Big Tech companies.

The proposed interventions could trim fees of up to 30 percent that Apple and Google charge for digital transactions through their mobile app stores, as well as prevent them from designing their systems to favor their own apps and services.

The UK’s Competition and Markets Authority on Wednesday said it expected to designate the two Silicon Valley groups with “strategic market status” under the UK’s new digital markets regime, allowing the agency to impose conduct rules on the companies.

A final decision on this designation will be made in October, after which it will begin consulting on potential interventions.

Sarah Cardell, CMA chief executive, said the agency’s investigation had “identified opportunities for more innovation and choice” on smartphones.

These include allowing developers to direct customers to pay or subscribe to digital services outside the app stores and ensuring greater “interoperability” between Apple’s services and those of third parties, for instance in digital wallets and smartwatches.

The CMA will also examine smartphone-based artificial intelligence services, such as Apple’s Siri voice assistant and Google’s Gemini, “to ensure a level playing field in this rapidly advancing sector.”

However, the agency will delay until next year a key decision on whether to require Apple to allow apps to be distributed without going through its App Store at all, prompting criticism from some developer campaign groups.

Tim Sweeney, head of Fortnite developer Epic Games, which has had a long-running dispute with Apple over its payments system, said the CMA’s planned interventions were “surprisingly weak” and called the delayed decision on alternative app stores a “missed opportunity.”

“The targeted and proportionate actions we have set out today would enable UK app developers to remain at the forefront of global innovation while ensuring UK consumers receive a world-class experience,” Cardell said. “Time is of the essence: as competition agencies and courts globally take action in these markets, it’s essential the UK doesn’t fall behind.”

Google and Apple oppose the outlined changes, arguing they could threaten user security and delay the launch of new products and services in the UK.

“We’re concerned the rules the UK is now considering would undermine the privacy and security protections that our users have come to expect, hamper our ability to innovate, and force us to give away our technology for free to foreign competitors,” Apple said. “We will continue to engage with the regulator to make sure they fully understand these risks.”

Oliver Bethell, Google’s senior director for competition, said the CMA’s move was “both disappointing and unwarranted” and that it was “crucial that any new regulation is evidence-based, proportionate, and does not become a roadblock to growth in the UK.”

Apple has repeatedly clashed with Brussels over the implementation of the EU’s Digital Markets Act, making changes to its platform after the European Commission accused the iPhone maker of failing to comply with its “online gatekeeper” rules.

The DMA also requires Apple to open up iOS features and data to its rivals and has demanded changes to its App Store, such as allowing users to install apps from outside its store.

The CMA said it was taking a different approach to the EU by being more “tailored” and iterative than the DMA’s blanket rules.

Last month, Google’s search services were the first Big Tech product to be targeted under the UK’s Digital Markets, Competition and Consumers Act, which was passed last year.

If a company’s products or services are designated as having “strategic market status,” it can last for a five-year period. Companies can be fined up to 10 percent of global turnover for breaching conduct rules.