The Competition and Markets Authority (CMA) has announced that Apple and Google have been designated as having ‘strategic market status’ in mobile platforms, following extensive consultation.

The designation of strategic market status (SMS) is a creature of the CMA’s new digital markets competition regime and requires a company within a particular digital activity to pass two tests: (1) it must have substantial and entrenched market power and (2) it must occupy a position of strategic significance. After launching investigations earlier this year proposing such a designation for Apple and Google in relation to their mobile platforms, the CMA has now confirmed that they both meet the two legal tests.

CMA’s announcement makes clear that the designation is “not a finding of wrongdoing and does introduce any immediate requirements”. However, it enables the CMA to consider “proportionate, targeted interventions to ensure that mobile platforms are open to effective competition, and that consumers and businesses that rely on Google and Apple can have confidence that they are treated fairly”.

As for the types of interventions that might be considered, the CMA published a blog earlier in the year in which it outlined areas that it will particularly focus on. These included ensuring fair and transparent app store rankings and app review processes, allowing the ability to ‘steer’ users out of app stores, and ensuring consumers “have a genuine choice over the services they use on their devices and are not steered to Apple and Google’s own services”. Possible interventions will be consulted upon shortly, before updated roadmaps are published by the CMA in the first half of next year.

In the meantime, Google – which was also designated with SMS in search services earlier this month (we commented on the proposed designation here) – has responded by saying that the designation is  “disappointing, disproportionate and unwarranted”, adding that “the CMA’s next steps will be crucial if the UK’s digital markets regime is to meet its promise of being pro-growth and pro-innovation”.

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