The UK's Competition and Markets Authority (CMA) is consulting on proposed changes to Apple and Google's app store payment rules, which could force the tech giants to allow developers to steer customers away from their platforms for payment. The move aims to reduce costs for app developers and ultimately lower prices for consumers.
Current Restrictions and Proposed Changes
Currently, Apple bans and Google restricts developers from directing customers to alternative payment methods, meaning developers must pay mandatory fees set by the platforms. The CMA's proposed measures would permit "steering" and require that any fees charged for this are "fair and reasonable."
The regulator stated: "The CMA would expect steering fees to be lower than current app store charges, with savings passed on to UK customers or invested back into the developers' businesses to support future innovation."
Strategic Market Status
This consultation follows the CMA's decision last October to grant Apple and Google "strategic market status" due to their dominance in the mobile market. This designation allows the regulator to intervene to increase competition, which it says will benefit consumers and businesses.
Will Hayter, the CMA's executive director for digital markets, will speak at the Informa Connect CompLaw conference on Tuesday, saying: "We are consulting today on draft conduct requirements to support so-called 'steering', or the ability for app developers to engage directly with their users outside Apple and Google's app stores. We think it is important to give both app developers and users more choice about how they communicate and how they transact. This is not only because choice is inherently valuable but also because we see this as the best way to introduce some competitive pressure in a vital part of the mobile ecosystem that is otherwise sorely lacking such pressure."
Industry Response
Google has responded by stating it already allows steering for developers and has changed its fees, though subject to certain restrictions. The company said: "We have already made the changes that the CMA is proposing today." Apple has been approached for comment but has not yet responded.
The CMA has concluded three strategic market status investigations and launched a fourth into Microsoft's business software ecosystem since the UK's digital markets competition regime began 18 months ago. Mr. Hayter will add: "In many cases, the market takes enough care of both companies and people – such is the power of competition to give people a choice of innovative products and services at reasonable prices, and to give companies with great ideas the chance to succeed. But sometimes that simply doesn't work in practice. If companies don't do right by consumers, we may have to step in."
