Comment by Competition and Markets Authority

Under Theme 2, we have examined the extent to which Apple and Google, as owners of the main app stores in their respective ecosystems, have market power in the distribution of native apps. This includes the extent to which there are suitable alternatives to the main app stores through which consumers can download and app developers can distribute native apps, as well as alternative methods through which a user can access the same content (for example, web-based alternatives and alternative devices such as games consoles). The App Store on iOS and Play Store on Android are the key gateways through which app developers can distribute apps to users on mobile devices. Our initial findings are that the App Store and Play Store face a lack of competition from within and outside of their respective ecosystems as a method of delivering native apps to users: * in Apple’s ecosystem, the App Store is the only method of native app distribution and so 100% of native apps downloaded on iOS devices are through the App Store [...] * the App Store and Play Store do not face significant competition from alternative devices, such as desktops or games consoles, largely because they are used differently to mobile devices, which can be used ‘on the go’. Therefore, non-mobile devices are not seen as a viable alternative option for mobile app developers Apple and Google are able to exercise the market power of their app stores through their processes for reviewing which apps can be listed on their app stores. Apple and Google set the rules to be followed by app developers and have discretion over whether to approve or reject apps. This control has enabled Apple to block certain types of apps being present on iOS altogether (such as cloud gaming services) and for other types of apps, the app review process for the App Store and Play Store provides an incentive or ability for Apple and Google to confer an advantage over their own apps and services and, more widely, can mean uncertainty and increased development costs for app developers. [...] For Apple, we have identified the following potential interventions to create alternative distribution channels on iOS for native apps: * Requiring Apple to allow alternative app stores on iOS: alternative app stores could be made available through sideloading from the web, or Apple could be required to allow app stores to be available for download from its App Store. Enabling alternative channels through which users can discover and engage with apps could lead to greater choice for users and increase competitive pressures on the App Store. In turn, this could also lead to better terms of use for developers, including on price, and better outcomes for consumers including lower prices for apps. * Requiring Apple to allow sideloading of native apps on iOS: as is already technically possible on Android devices, a requirement to allow sideloading of apps on iOS would provide an additional source of potential competition to the App Store.