The UK’s Competition and Markets Authority has labeled Apple and Google as having strategic market status in key areas of their mobile ecosystems, granting sweeping, targeted regulatory authority over the operating systems, app stores and browsers that form the foundation of their businesses. The ruling presages a new kind of regulation for the pair, who between them control practically the entire smartphone market in Britain, and could have lasting effects on how software, services and payments function on iOS and Android.
What Strategic Market Status Is In UK Regulation
Strategic market status, or SMS, is a UK regime established in the Digital Markets, Competition and Consumers Act. It relates to firms with entrenched market power and strategic status, which will be used by the CMA’s Digital Markets Unit to introduce specific codes of conduct, make interoperability a requirement and intervene in order to increase competition. Noncompliance can be punished with fines of as much as 10% of worldwide turnover, in addition to daily penalties for continued noncompliance.
The CMA’s move comes after months of investigation and discussions with more than 150 stakeholders, including developers, competing platforms, advertisers and consumer groups. The regulator determined that Apple and Google set the rules for how businesses can reach users, and these rules can limit choice, innovation and pricing throughout the economy.
Crucially, SMS is not a determination of unlawfulness. Instead, it creates a five-year designation period in which the CMA can intervene proactively to prevent barriers to competition ranging from default settings and data access to payment restrictions.
Why Apple And Google Were In The Crosshairs
More than 99% of smartphones in the UK use iOS or Android, according to the CMA’s earlier mobile ecosystems study. When a consumer chooses an ecosystem, it can be expensive to defect: purchased apps, subscriptions, photo libraries, wearables and messaging ties all make for sticky loyalty. That lock-in provides platform owners with leverage over app distribution, monetization and technologies such as browser engines.
The authority identified the places where platform control has economy-wide impact. These range from commissions on in-app purchases, restrictions around alternative app stores and billing, access to hardware capabilities like NFC for tap-to-pay and Apple’s requirement that iOS browser apps use its WebKit rendering engine. Defaults are also important: where you are placed on your phone’s home screen, in search settings and even reach through pre-installs can guide billions of users toward one choice or another.
The CMA also looked at whether new technologies might counteract this power. Its perspective is that near-term advances, like AI features that run on devices and in cloud services, would not materially erode Apple or Google’s market position within its five-year timeline for designation.
Possible Remedies And Impact On The Industry
Under SMS, the CMA can apply conduct rules to ensure that consumers are treated fairly, have a choice in what they pay for and receive, and how their personal data is processed.
Potential results could include:
- Requiring default choice screens
- The ability to offer alternative app stores or direct downloads
- More flexible payment processing options
- Wallet platforms being granted equivalent access to major device APIs as wallets and browsers
For developers, the consequences could range from altered fees and distribution options to changes in access to users. For consumers, the trade-offs are the familiar ones: greater choice and potentially lower prices against new complexity and potential security or privacy implications. The CMA has said that it will tailor its interventions to maintain the safety of devices and remove any unnecessary restrictions.
The British approach will be informed by recent precedents elsewhere. In the European Union, gatekeeper requirements in the Digital Markets Act have already spurred alternative app installation and new payment methods. The UK regime is similarly toned, but more tailored; the DMU can impose firm-specific rules and adjust them if market conditions change.
Apple And Google Bite Back Against UK SMS Designation
Both companies also questioned the logic of designation, arguing that regulations could weaken platform security and the integrated user experience. Apple says prescriptive requirements can delay feature rollouts and make privacy protections more complex than they need to be. Google often focuses on the competitive pressure it experiences across devices and services, as well as voluntary changes that are already in motion — such as lower commissions for small developers and smoother billing in some sectors.
For the CMA, what is required to ensure safety and protect consumers is proportionate, targeted obligations benefiting competition. For instance, its 2022 mobile ecosystems report observed that increasing the browser engine choice in the market could prompt greater web app performance and capability, but still protect against threats with strong security standards.
How This Fits Into Global Scrutiny Of Big Tech
The UK action is the latest in a converging regulatory arc among major markets. The EU’s DMA, the US antitrust cases against dominant platforms and investigations by competition authorities from Australia to Japan have circled around app store control, default settings and self-preferencing. The UK’s strength is agility: the DMU can design granular rules for particular services, from mobile wallets to app discovery, and iterate as evidence builds up.
Market dynamics also support intervention. Kantar’s new figures see Apple claim a larger share of sales in the UK than it does in many European countries — but Android as an ecosystem remains a near counterweight. It’s that duopoly setup, the CMA contends, that restricts competitive pressure at crucial choke points such as distribution and payments.
What To Watch Next As The CMA Sets New Rules
The next immediate step is a consultation on specific conduct rules and any pro-competition interventions — for instance, interoperability requirements or default settings. Timelines can differ, but the DMU generally meets implementation with monitoring and enforcement benchmarks.
Developers and consumer groups are likely to press for pragmatic wins: easier switching across platforms, real browser competition on iOS, more transparent app review and lower or less rigid fees. Apple and Google will seek carve-outs to protect security and product integrity, while experimenting with approaches to compliance developed in the EU and elsewhere.
Whatever the final shape of the rules, SMS designation puts the UK on something of a trajectory toward more active oversight of mobile platforms. For a market in which almost any point of consumer contact goes through iOS or Android, even small shifts have the potential to reverberate for years in pricing, innovation and user choice.
