CMA must tackle Apple and Google duopoly to ‘unlock UK growth’
One of the UK’s leading left-wing think tanks has called on the government to strengthen the powers of the competition regulator to curb the dominance of tech giants like Apple and Google.
It has warned that their stranglehold on app marketplaces is holding back innovation, investment, and growth in the British economy.
In a new report published on Thursday, the Institute of Public Policy Research (IPPR) argues that the Competition and Markets Authority (CMA) must be “beefed up” to deliver faster and more forceful interventions in digital markets, especially against “exploitative practices” like excessive commission fees charged by Apple and Google on their respective app stores.
App store dominance costing UK developers
Apple and Google currently charge up to 30 per cent commission on in-app purchases, a practice under investigation by the CMA.
The IPPR estimated that both tech titans are likely to have raked in between £1.5bn and £2.4bn from UK app store revenues in 2024 alone.
Meanwhile, Apple’s average gross profit margin on its App Store has ranged from 75 to 100 per cent, according to earlier CMA findings.
Dr George Dibb, associate director for economic policy at IPPR, said the concentration of power in app marketplaces is “extracting value” from UK businesses and workers.
“Enforcing the UK’s competition rules isn’t anti-business – it’s a pro-business, pro-worker, pro-growth agenda. If we weaken those rules, we’re letting dominant firms and tech giants hold back innovation and investment”, he said.
IPPR’s analysis suggested that if commission fees were reduced to more competitive levels of around 12 per cent – similar to those seen in open platforms like PC gaming – it would result in a £1.4bn revenue shift from tech giants to UK developers in 2024.
What’s more, this figure could rise to £3.3bn by 2029, money which the think tank has argued would be far more likely to be reinvested in UK-based innovation, job creation and wage growth.
Rising political pressure on big tech
The IPPR joins a growing chorus of voices raising concerns over the dominance of Apple and Google in the mobile software ecosystem.
Lord Andrew Tyrie, former chair of the CMA, said the report was “timely”, and warned that weak competition enforcement had resulted in “lower growth, less innovation, and widening income differentials”.
“Competition is the lifeblood of free enterprise and healthy businesses. We don’t have enough of it”, he said.
“The CMA has recently been given huge new powers and tools. It now needs to deploy them, and vigorously”.
Craig Beaumont, executive director at the Federation of Small Businesses (FSB), echoed the call for stronger oversight, saying that digital markets require forward looking regulation rather than retrospective enforcement.
“UK small businesses know that competition policy, done right, isn’t anti-business, it’s pro-entrepreneurialism”, he said. “We welcome the push to champion SME dynamism over incumbent protection”.
Calls for action mirror global antitrust scrutiny
IPPR’s report comes amid mounting international pressure on the market’s power of Apple and Google.
In the US, both heavyweights are under legal fire.
Notably, prominent startup accelerator Y Combinator (YC) recently submitted a brief in the US Department of Justice’s monopoly case against Google, describing the firm as a “monopolist” whose behaviour has “stunted the startup ecosystem”.
YC’s filing accused Google of creating a “kill zone” around emerging markets like AI and web search, discouraging venture capital investment in those areas.
It argued that unless Google opens up parts of its business – such as search indexing to allow competitors to train large language models (LLMs) – further regulation or breakups may be necessary.
“We love Google”, wrote YC chief executive Garry Tan, “but we want ‘little tech’ to succeed too”.
For its part, Google said in a previous blog post that proposed remedies by regulators are “radical and sweeping”, and risk harming developers, businesses, and consumers alike.
“This is about re-balancing the economy”, said Dibb. “A competition policy fit for the 21st century should empower British businesses, not just enrich overseas tech monopolies”.