The UK watchdog is challenging the tech platforms over the barriers to steering in their respective app stores..
The UK’s Competition and Markets Authority (CMA) has brought forward a challenge against Google and Apple over what it calls their “effective duopoly” on mobile platforms.
The regulator is particularly interested in removing the barriers to “steering”, which refers to apps guiding users to websites to make purchases on platforms outside of Google and Apple, which would help competition in the space.
Potential action from the regulator could include a potential removal of mandatory fees imposed by Google and Apple – who currently charge up to 30% commission on anything purchased within apps – such as subscriptions.
This is the reason Spotify infamously redirects users to its desktop website instead of an in-app purchase for subscriptions. As such, the CMA is looking to encourage the tech platforms to implement the charges in a fairer way.
Will Hayter, executive director for digital markets, CMA, said: “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.”
He added that it’s important to allow apps and users a border choice in their transactions and where they take place.
Google has already implemented changes, it said. The tech giant has allowed apps to steer users outside of its PlayStore for transactions, as well as changing the way that fees are applied on steering users to alternative payment methods.
An Apple spokesperson told Business Matters; “When users are directed away from Apple’s trusted payment infrastructure, they lose the protections they rely on Apple to provide. We will continue to make our concerns clear in our ongoing dialogue with the CMA.”
The watchdog is also weighing up forcing the iPhone maker to open access to its near-field communication (NFC) technology – the microchip which facilitates contactless payments in order to enable developers to build their own tap-and-pay technologies.
Why this matters
Mobile app ecosystem has been very closed up until now, with marketers often at the mercy of the big tech companies like Google and Apple. If this challenge by the CMA is successful, for marketers this could see customer acquisition costs come down. It also means they could reclaim lost advertising revenue and it provides them with greater control on the end-to-end user journey.
For affiliates in particular, the relaxed rules could mean they could promote external links for sign-ups, special offers alongside other payment options off-platform. In turn, this has the potential improve conversion optimisation and higher net retention from users who may have abandoned a purchase due to frictions in the app-store.
