The United Kingdom’s Competition and Markets Authority (CMA) has officially classified Apple and Google as entities possessing strategic market status (SMS) within their respective mobile platforms. This designation, announced on October 22, 2025, is poised to introduce new regulatory obligations and potential restrictions for both tech giants.
Background and Investigation
In July 2025, the CMA concluded a comprehensive six-month investigation into the operations of Apple and Google. The focus was to determine whether these companies should be designated under the UK’s newly enacted Digital Markets, Competition, and Consumers Act (DMCC). The DMCC, mirroring the European Union’s Digital Markets Act (DMA), aims to implement targeted measures to enhance competition within digital markets, thereby fostering innovation, investment, and economic growth across the UK.
Findings and Designation
After engaging with over 150 stakeholders and conducting in-depth analyses, the CMA confirmed that both Apple and Google hold substantial and entrenched market power, coupled with strategic significance in their respective mobile ecosystems. This SMS designation is not an allegation of misconduct but serves as a foundation for the CMA to consider proportionate interventions. The objective is to ensure that mobile platforms remain open to effective competition, instilling confidence among consumers and businesses reliant on these platforms.
Key Considerations
The CMA’s investigation highlighted several critical points:
1. User Loyalty: British consumers exhibit a low propensity to switch between Android and iOS platforms, indicating strong brand loyalty and potential market rigidity.
2. Developer Dependence: To effectively reach the consumer base, developers and businesses must engage with both platforms, underscoring the duopoly’s influence over market access.
3. Artificial Intelligence Impact: The anticipated advancements in artificial intelligence over the next five years are unlikely to diminish the market power held by Apple and Google, suggesting sustained dominance in the foreseeable future.
Statements from the CMA
Will Hayter, the CMA’s Executive Director for Digital Markets, emphasized the pervasive use of Apple and Google’s mobile platforms by thousands of businesses to market and sell products and services to millions of customers. He expressed concern that the platforms’ existing rules might be stifling innovation and competition. Hayter also highlighted that the app economy contributes approximately 1.5% to the UK’s Gross Domestic Product (GDP), underscoring the importance of ensuring these markets function optimally to encourage business investment, innovation, and national economic growth.
Potential Implications for Apple and Google
While specific regulatory actions following the SMS designation have yet to be detailed, potential measures could include:
– Opening Mobile Platforms: Apple and Google may be required to allow alternative app stores and enable sideloading, thereby reducing their control over app distribution and fostering a more competitive environment.
– Revising Platform Policies: Both companies might need to adjust their platform rules to eliminate practices that could be perceived as limiting competition or innovation.
Apple’s Response
Historically, Apple has contested regulatory approaches similar to the CMA’s. The company has argued that it faces intense competition across all markets and strives to deliver superior products, services, and user experiences. Apple has expressed concerns that adopting EU-style regulations in the UK could undermine these efforts, potentially compromising user privacy and security, delaying the introduction of new features, and resulting in a fragmented and less seamless user experience.
Broader Context
The CMA’s decision aligns with a global trend of increased scrutiny over major tech companies’ market practices. Regulators worldwide are examining the influence of tech giants to ensure fair competition and protect consumer interests. The outcomes of such investigations could lead to significant changes in how these companies operate, particularly concerning their control over app ecosystems and the broader digital market landscape.
Conclusion
The CMA’s designation of Apple and Google as holding strategic market status marks a pivotal moment in the regulation of digital markets within the UK. As the CMA considers appropriate interventions, the tech industry, consumers, and businesses alike await further developments that could reshape the competitive dynamics of mobile platforms.
