An investigation by the U.K. competition authority into Apple and Google’s mobile browsers has found that their policies are stifling innovation and potentially hindering economic growth.

The primary gateway to the web on mobile devices is through mobile browsers, which are apps that enable consumers to access the internet and allow businesses to reach them with their content and products. According to a summary of the 611-page final decision report published on Wednesday, the issues identified in the report mean that consumers may be missing out on new features when using mobile browsers, and businesses are limited in their ability to reach consumers through browser apps.

Most of the concerns raised relate to Apple’s policies, which dictate how mobile browsers operate on its devices, as stated in a press release. These concerns include Apple’s requirement that other browsers on iOS use its WebKit browser engine, which restricts their ability to distinguish themselves from Apple’s Safari browser by offering enhanced features. Additionally, Safari has greater or earlier access to key platform features compared to rival browsers, which the inquiry group believes is stifling competition, including around privacy features, and hindering the development of progressive web apps on iOS.

The inquiry group also raises concerns about Google, specifically regarding revenue-sharing arrangements between Google and Apple, where Google pays Apple a significant portion of the search ad revenue generated from traffic on Safari and Chrome on iOS.

The report notes that “we have found that Apple and Google earn significant revenue when their key rival’s mobile browser is used on iOS for web searches on Google, which substantially reduces their financial incentives to compete.” The extent of the revenue-sharing arrangement is “so large” that it significantly limits the financial incentive to compete.

But still no enforcement in sight

Despite the numerous negative findings and long-standing U.K. competition concerns over Apple and Google’s grip on mobile, there is still no competition enforcement action in sight. The report recommends waiting for special abuse control powers to take effect.

These powers would be triggered if an ongoing investigation into the two tech giants, which was launched in January, confirms that they fall within the scope of the beefed-up antitrust powers wielded by the Competition and Markets Authority (CMA) since a major U.K. reform of competition law targeting digital giants came into force in January. As a result, remedies for the anti-competitive issues identified remain uncertain.

The report advises against attempting to address the competition concerns using standard market investigation powers, citing “a number of significant risks to the effectiveness of these measures.”

Cloud gaming, which was initially part of the market investigation, was dropped from the inquiry last November after Apple made some changes that the regulator believed would alleviate competition concerns.

The report, published by an independent inquiry group set up by the CMA in November 2022, follows similar preliminary conclusions reached last fall. However, the inquiry group is no longer concerned about certain choice screen issues it had previously raised.

An update by Apple in December, which changed how iOS users can switch their default browser, resolved concerns the inquiry group had on that platform. Additionally, Google provided new evidence regarding its use of prompts to encourage users to set Chrome as their default browser on Android, which also addressed the inquiry group’s concerns.

Nevertheless, the inquiry group still takes issue with certain screen architecture design choices that it believes may be making it harder for users to switch to alternative mobile browsers compared to Apple’s Safari and Google’s Chrome native browsers.

Future remedies?

The final report proposes a range of potential remedies, or “appropriate interventions,” for the mobile browser competition concerns, which are outlined in full in Appendix D.

The suggested remedies include requiring Apple to allow the use of alternative browser engines and an interoperability requirement that would mandate equivalent access to iOS features for rival browsers, as well as a ban on the Chrome revenue share, among others.

Additionally, the report proposes regulating how Google displays browser choice screens, including the frequency of default browser pop-ups.

While none of the proposed remedies are being implemented as part of this CMA market investigation, they could provide guidance on how the regulator might ultimately enforce action against Apple and Google’s mobile duopoly.

This would depend on the Digital Markets Unit’s investigation determining that Apple and Google have Strategic Market Status (SMS), meaning they would fall under the special abuse control regime and could be subject to such bespoke interventions. The SMS investigations into Apple and Google are expected to conclude later this year.

Margot Daly, chair of the CMA’s independent inquiry group, commented in a statement:

“The analysis set out in our report and the range of potential interventions considered to address the market issues we have identified merits consideration by the CMA under its new powers, which have been specifically designed for digital markets. So, I welcome the CMA’s prompt action to open strategic market status investigations into both Apple and Google’s mobile ecosystems. The extensive analysis we’ve set out today will help that work as it progresses.”

Apple and Google were contacted for comment on the inquiry group’s final report.

Apple’s statement reads:

“Apple believes in thriving and dynamic markets where innovation can flourish. We face competition in every segment and jurisdiction where we operate, and our focus is always the trust of our users. We have concerns with this report and believe the remedies it discusses would undermine privacy, security, and the overall user experience. We will continue to engage constructively with the CMA to best address their concerns.”