The UK Competition and Markets Authority (CMA) has initiated an investigation into Apple and Google to assess whether the tech giants hold strategic market status within their mobile ecosystems, including operating systems, app stores, mobile browsers, and digital wallets.
Regulatory Collaboration
While the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) have been examining the rise of Big Tech in digital wallets, they will now support the CMA’s broader investigation.
The CMA’s probe follows a July 2024 Call for Information, highlighting industry concerns over the dominance of Apple Pay and Google Pay. Stakeholders raised issues such as:
- NFC Technology Access: Apple’s historical restrictions on NFC technology use.
- Ecosystem Control: Both companies pre-installing their wallets, steering consumers toward their own payment systems.
- Limited Competition: A lack of options within mobile wallets, with most offering only card payments, restricting account-to-account payments, stablecoins, or a potential Central Bank Digital Currency (CBDC).
Rising Digital Wallet Adoption
The use of digital wallets in the UK has surged, with card transactions via digital wallets rising from 8% in 2019 to 29% in 2023. Approximately 20% of card users used a digital wallet for over 50% of their transactions, while 10% used one for over 75% of their purchases.
Regulatory Stance
The FCA and PSR acknowledge the competition issues and are opting to let the CMA lead under the Digital Markets, Competition and Consumers Bill (DMCC) Act.
They stated:
“The competition issues raised by stakeholders have strong linkages with the CMA’s mobile ecosystems work. While we have not drawn specific conclusions at this stage, we are clear that the competition issues and opportunities raised do require further consideration and investigation.”
Beyond competition concerns, the FCA, PSR, and HM Treasury (HMT) will also address operational resilience, consumer rights, and protection issues.
