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Apple and Google targeted by UK competition watchdog over 'duopoly' in mobile markets

Apple and Google will be investigated over their market power in the mobile ecosystem. Photo: GettyTeens spying friend phone, texting or surfing social networks over orange background
Apple and Google will be investigated over their market power in the mobile ecosystem. Photo: Getty

Britain's competition watchdog is launching a review into how it can crack down on Apple (AAPL) and Google's (GOOG) dominance in the mobile market.

The Competition and Markets Authority (CMA) concluded the Silicon Valley tech giants run an "effective duopoly" on mobile ecosystems, following a year-long study of the companies’ mobile ecosystems.

CMA said this allows the companies "to exercise a stranglehold over these markets, which include operating systems, app stores and web browsers on mobile devices".

According to the regulator, the companies had a "strong grip" over "these increasingly crucial ecosystems" and were able to "unilaterally determine the rules of the game", making it difficult for rival browsers or other app stores to compete.

Andrea Coscelli, chief executive of the CMA, said: "When it comes to how people use mobile phones, Apple and Google hold all the cards.

"As good as many of their services and products are, their strong grip on mobile ecosystems allows them to shut out competitors, holding back the British tech sector and limiting choice."

Read more: Google faces second UK probe over ads monopoly

"We all rely on browsers to use the internet on our phones, and the engines that make them work have a huge bearing on what we can see and do," she added.

"Right now, choice in this space is severely limited and that has real impacts — preventing innovation and reducing competition from web apps. We need to give innovative tech firms, many of which are ambitious start-ups, a fair chance to compete."

The iPhone maker is also said to have "blocked the emergence" of cloud gaming services on its App Store.

"Gaming apps are a key source of revenue for Apple and cloud gaming could pose a real threat to Apple’s strong position in app distribution," Coscelli said.

"By preventing this sector from growing, Apple risks causing mobile users to miss out on the full benefits of cloud gaming."

Separately, Google will also be probed over suspected anti-competitive behaviour relating to the distribution of apps on Android devices, particularly Play Store rules that force developers to use its own payment system.

The latest investigations add to eight cases currently open against major tech firms as the watchdog ramps up its scrutiny of the sector.

Read more: UK and EU open antitrust probes into Google and Meta over online ads

Apple said in a statement: "We respectfully disagree with a number of conclusions reached in the report, which discount our investments in innovation, privacy and user performance — all of which contribute to why users love iPhone and iPad and create a level playing field for small developers to compete on a trusted platform."

The company said it would "continue to engage constructively" with the CMA.

Google has not yet returned a request for comment from Yahoo Finance UK at the time of writing.

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