CMA Targets Apple & Google Payment Controls in Next Phase of UK Digital Markets Crackdown

Key Takeaways

• CMA Targets App Store Payment Restrictions: The UK regulator is consulting on new conduct requirements that would allow developers to direct users to alternative payment methods outside Apple and Google's app stores, increasing competition in mobile marketplaces.
• Platform Fees Face Greater Scrutiny: Apple and Google could continue charging fees for facilitating off-platform transactions, but the CMA says those charges should be fair, reasonable and supported by an evidence-based assessment of cost and value.
• Apple's NFC Access Under Review: The CMA is also considering requiring Apple to provide broader access to iPhone NFC functionality, potentially enabling greater innovation in digital wallets, account-to-account payments, digital identity services and other contactless applications.

Deep Dive

If an app developer builds a product and acquires a customer, who owns that relationship? The developer who created the service, or the platform that stands between the two? The UK's Competition and Markets Authority believes the answer has drifted too far toward the latter.

On Tuesday, it opened consultations on a new set of conduct requirements for Apple and Google that would loosen the companies' control over how developers communicate with users, how payments are processed and, potentially, who gets to build the next generation of digital wallets on the iPhone. At the center of the proposals is what regulators call "steering," which is simply allowing developers to tell customers they can complete purchases somewhere other than Apple's App Store or Google's Play Store.

That freedom is largely absent today. Apple prohibits it in the UK. Google permits it only under restrictions. The consequence has never been merely about where a button appears on a screen. It has been about preserving the platforms' role as gatekeeper to every commercial relationship that passes through their marketplaces.

The CMA wants to weaken that gatekeeping role without pretending it does not exist. Its consultation would allow developers to direct users toward alternative payment channels while still permitting Apple and Google to charge for the services they continue to provide. The regulator's position is less that those fees should disappear than that they should finally have to justify themselves.

The framework under consultation would require any steering fees to be fair and reasonable, assessed against both the cost of providing the service and the value it delivers. The CMA has also made its expectation unusually clear. If steering becomes possible, the associated charges should be lower than today's app store commissions, with the savings either passed to consumers through lower prices or retained by developers to fund future innovation.

Speaking at the Informa Connect CompLaw conference, CMA Executive Director for Digital Markets Will Hayter described the proposal as an attempt to restore competitive pressure to a part of the mobile ecosystem where too little of it exists. Giving developers and consumers greater freedom over how they communicate and transact, he argued, is valuable not simply because it expands choice but because markets tend to function better when participants can make genuine decisions rather than operate within a single prescribed route.

He was equally careful not to argue that Apple and Google should provide their platforms for nothing. Companies are entitled to be paid for services they provide, he said. The question is whether those charges can withstand scrutiny once competition is allowed back into the conversation.

Opening the iPhone Beyond the Wallet

The second consultation is, on its face, about a piece of hardware that most users rarely think about. Near field communication, or NFC, enables the short-range wireless exchanges behind contactless payments. Yet control over that small chip has become another way of controlling the wider ecosystem built around it.

The CMA says businesses have raised concerns that Apple's commercial terms and pricing have made meaningful access to NFC functionality difficult. It is now considering a conduct requirement that would allow developers to use that capability within their own iOS applications.

The immediate effect would be to support contactless card payments outside Apple's own wallet environment. The longer-term implications are considerably broader. The regulator points to account-to-account payments, digital currencies, stablecoins, digital identity credentials and even digital car keys as examples of services that could emerge if access to the technology becomes more open.

Rather than prescribing the solution outright, the consultation asks developers two practical questions that may ultimately prove more consequential than the principle itself: how NFC access should technically be delivered, and what Apple should be permitted to charge for it.

Those details matter because competition policy increasingly lives inside technical architecture. The broad objective may be easy to agree upon. The mechanics determine whether it succeeds.

A Different Kind of Digital Regulation

The consultations arrive 18 months after the UK's digital markets competition regime began operating under the Digital Markets, Competition and Consumers Act, a framework designed less to punish past conduct than to shape future behavior before markets become irreversibly closed. Since then, the CMA has completed three Strategic Market Status investigations, opened a fourth examining Microsoft's business software ecosystem, imposed three conduct requirements relating to Google Search and secured commitments from both Apple and Google covering app distribution and interoperability for UK developers.

Hayter argued that most markets require little intervention because competition itself disciplines companies more effectively than regulators can. But when that discipline breaks down, he said, intervention becomes necessary. In his view, the Digital Markets, Competition and Consumers Act succeeds because it establishes clear boundaries without freezing them in place, allowing the rules to evolve alongside the markets they govern.

The consultations also arrive against a moving international backdrop. Google introduced new global Play Store terms on June 24 that took effect in the UK on June 30, allowing developers to steer users toward external payment options under certain conditions while revising its developer fee structure. The CMA said it will assess the impact of those changes during the next phase of its mobile platforms work rather than assume they resolve the underlying competition concerns.

That caution reflects something larger than this consultation alone. Questions about app store economics are no longer confined to London. Regulators across the European Union, the United States and Japan are testing many of the same assumptions about platform power, developer choice and the price of access to digital marketplaces.

The UK's consultation does not settle those questions. It does something quieter, and perhaps more consequential. It asks whether the architecture of the mobile economy should continue to assume that every relationship between developer and customer must first pass through the platform that introduced them. That assumption has shaped the smartphone business for more than a decade. The CMA is now asking whether it still deserves to.

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