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The UK’s competition regulator has opened a consultation that could force Apple and Google to loosen their grip on how UK customers pay for apps.
The move is designed to bring down prices and spur innovation in the country’s tech sector.
The Competition and Markets Authority (CMA) said on Tuesday it was consulting on new conduct requirements for the two companies under the UK’s digital markets competition regime, targeting restrictions that currently stop app developers from directing customers towards cheaper payment options outside Apple and Google’s own platforms.
The CMA designated Apple and Google’s mobile platforms as holding an “effective duopoly” last October, citing the 90-100% of UK mobile devices running on their platforms.
What is ‘steering’?
The practice, known as steering, is basically about letting developers tell customers there is a cheaper way to pay, one that skips the mandatory fees baked into Apple’s App Store or Google’s Play Store.
Right now, Apple bans it outright in the UK, while Google only allows it in a limited way.
Scrap those restrictions, the CMA said, and developers would finally be free to point users elsewhere to pay.
But Apple and Google could still charge for allowing that, so the regulator is also drawing up principles to make sure any new steering fees are fair.
Under its proposed framework, the CMA said it would expect those fees to come in lower than existing app store charges, with the savings either landing in customers’ pockets or ploughed back into developers’ businesses.
Google changes its terms
The consultation comes days after Google announced new global terms for its Play Store which include allowing developers to steer users towards completing transactions outside the store, subject to certain conditions.
Google has also altered the fees it charges developers, including those who use steering. The CMA said it would assess the impact of these changes during the next phase of its work on mobile platforms.
Under the Digital Markets, Competition and Consumers Act, the CMA must consult before imposing any new conduct requirement.
App store terms, including steering practices, remain under regulatory scrutiny in several other jurisdictions, including the EU, the US and Japan.