App Store Racket: Why Won't the CMA Act?

Every time a smartphone user buys a subscription through an app, pays to unlock a premium feature, or makes an in-game purchase, a portion of that transaction disappears into the coffers of either Apple or Google. The consumer rarely knows. The developer has no choice. And the regulator, despite holding the tools to intervene, has so far moved with a restraint that is starting to look less like prudence and more like timidity. This is the app store monopoly in plain sight — and it is costing ordinary people money every single day.

The App-Store Duopoly and Its Hidden Cost to Consumers

Two companies control the operating systems running on virtually every smartphone in Britain. Apple's iOS and Google's Android together account for the overwhelming majority of the UK mobile market, and each company operates the only app store permitted on its own platform. This is not a competitive marketplace. It is a toll booth — one where the toll-setter and the road-builder are the same entity.

The commission structure is well-documented. Apple and Google typically charge developers between 15 and 30 percent on in-app purchases and subscriptions, rates that most small businesses would find punishing if applied to any other form of distribution. Developers do not absorb these costs quietly; they pass them on. Independent analysis by market researchers and consumer groups consistently finds that app subscription prices are structurally inflated to accommodate platform fees. A user who thinks they are paying a developer for a product is, in practice, also paying an undisclosed surcharge to whichever platform they happen to own a phone from.

The public largely does not know this happens. That is the point. The opacity of the arrangement is inseparable from its profitability.

Developers Caught in the Crossfire

The position of developers — particularly smaller studios and independent publishers — is one of coerced dependency. There is no viable alternative distribution channel for iOS applications in the UK. Want to reach iPhone users? You go through Apple's App Store, on Apple's terms, at Apple's price. The choice is compliance or irrelevance.

For larger players, the financial burden is painful but survivable. For the startup that has spent two years building a productivity tool, or the small media outlet offering a subscription news service, a 30 percent commission fundamentally distorts their economics. It limits what they can afford to pay staff, how cheaply they can price their product for consumers, and whether they can compete against platform-native apps that Apple or Google choose to favour.

The power asymmetry extends beyond pricing. Platforms set rules about what content is permissible, how payment flows must be structured, and whether developers can even direct their users to a cheaper option available on the web. Spotify, for instance, spent years unable to tell its own users through the iOS app that they could subscribe at a lower price via a browser. The platform controlled the message, the margin, and the merchant.

The CMA's Mandate and Why It Has the Power to Act

Parliament did not leave the Competition and Markets Authority without instruments. The Digital Markets, Competition and Consumers Act — which received Royal Assent in 2024 — creates a specific framework for designating companies with Strategic Market Status and imposing enforceable conduct requirements on them. The legislation was designed with precisely this kind of entrenched platform power in mind.

The CMA has already conducted substantial market investigation work on mobile ecosystems. Its 2022 market study into mobile browsers and cloud gaming identified Apple and Google as holding overwhelming positions of power in their respective platform environments, and documented how those positions were used to limit competition. The regulatory authority exists. The investigatory groundwork has been done. The question is not whether the CMA can act, but why the pace of action remains so cautious when the harms are so well understood.

Strategic Market Status designation, once applied, would allow the CMA to mandate interoperability, prohibit self-preferencing, and impose requirements around fair access and transparent pricing. These are not speculative remedies — they are the stated purpose of the DMCC Act framework. The regulator is sitting on a set of powers that Parliament specifically crafted for this moment.

Parliamentary Scrutiny: What Lawmakers Are Demanding

Chi Onwurah, the Labour MP for Newcastle upon Tyne Central and West and chair of the parliamentary science, innovation and technology committee, has made this a consistent area of scrutiny. The concerns she and the committee have raised are not abstract. They run from the personal data harvested by platform operators and the behavioural profiles they construct of users, to the algorithms shaping what children encounter and the economic leverage extracted from developers and consumers alike.

What makes the committee's work significant is that it refuses the framing that digital regulation is somehow separate from kitchen-table economics. The argument being advanced — and it is a compelling one — is that big tech's grip on everyday life is both broader and more costly than most voters appreciate. The app store monopoly is one node in a much larger system of extraction. Naming it, and demanding that the CMA act on it, is part of holding that system to account.

Parliamentary committees cannot direct the CMA's enforcement calendar. But sustained scrutiny from a cross-party committee chaired by someone with Onwurah's background in technology policy does create political conditions in which regulatory inaction becomes harder to sustain. The question being pressed is not theoretical. Why does the regulator have the power to end this and choose not to use it?

Why Inaction Is Itself a Policy Choice

There is a temptation, in regulatory circles, to treat caution as neutrality. It is not. Every month the CMA delays formal action under the DMCC Act is a month during which Apple and Google continue collecting commissions, developers continue absorbing unfair terms, and consumers continue paying above-market prices for digital goods. The status quo has victims. Maintaining it is a choice.

The argument that intervention might chill investment or disrupt innovation in the mobile ecosystem deserves to be taken seriously and then rejected on the evidence. Both Apple and Google are among the most profitable companies in human history. Their platform revenues do not depend on the commission model surviving intact. What depends on it is the scale of extraction — and that is not a legitimate public interest.

There is also a geopolitical dimension that regulators sometimes invoke as a reason for softness. These are American companies. Challenging them carries diplomatic freight. But the CMA is a UK regulator with a UK mandate, accountable to Parliament and to the millions of smartphone users who are paying more than they should for apps because a duopoly faces no meaningful competitive discipline.

What Real Reform Would Look Like

Meaningful reform does not require the dismantling of Apple or Google. It requires their platforms to compete fairly.

Sideloading — the ability to install apps from sources other than the official platform store — would immediately introduce competitive pressure on commission rates. If developers could distribute to iPhone users without paying Apple a percentage, the current fee structure would face market discipline for the first time. The European Union has already moved in this direction under the Digital Markets Act, and the early evidence is that the sky has not fallen in.

Mandatory interoperability requirements, enforceable conduct standards around self-preferencing, and genuine transparency about how pricing policies affect end consumers would together constitute a functional reform agenda. None of it is exotic. All of it is within scope for the CMA acting under the DMCC Act.

The app store monopoly is not a complicated problem with no available solution. It is a straightforward abuse of market position, well-documented, legally addressable, and costing British consumers and businesses real money. The CMA has the power. Parliament is watching. The only remaining question is whether the regulator will choose to act — or continue choosing, through inaction, to let the racket run.

Source: Opinion | The Guardian