One of Britain's foremost progressive think tanks has urged the government to fortify the powers of the competition regulator in order to challenge the tech behemoths such as Apple and Google.
The think tank expressed concerns about how their tight grip on app marketplaces impedes innovation, investment, and economic development in the º£½ÇÊÓƵ, as reported by .
On Thursday, the Institute of Public Policy Research (IPPR) released a report which contends that the Competition and Markets Authority (CMA) requires strengthening to enable more prompt and impactful interventions in digital marketplaces, particularly to tackle "exploitative practices" like the excessive commission fees levied by Apple and Google on their app stores.
Apple and Google are under scrutiny by the CMA for charging up to 30 percent commission on in-app transactions.
According to calculations by the IPPR, these two technology giants could be earning between £1.5 billion and £2.4 billion from º£½ÇÊÓƵ app store earnings in 2024.
Moreover, previous findings by the CMA suggest that Apple has been reaping gross profit margins ranging from 75 to 100 percent on its App Store.
Dr George Dibb, head of the Centre for Economic Justice at IPPR, commented that the concentration of power within these app marketplaces is "extracting value" from British businesses and the workforce.
"Enforcing the º£½ÇÊÓƵ'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.
The IPPR's study indicated that reducing commission fees to more competitive levels around 12 per cent, akin to rates on open platforms such as PC gaming, could see a £1.4bn revenue shift from tech giants to º£½ÇÊÓƵ developers in 2024.
Furthermore, there's potential for this figure to climb to £3.3bn by 2029, which, the think tank argues, would have a higher likelihood of being reinvested in domestic innovation, job creation, and wage growth.
Rising political pressure on big tech
The IPPR is adding its voice to the increasing concerns regarding Apple and Google's dominance in the mobile software environment.
Lord Andrew Tyrie, former chair of the CMA, considered the report "timely," cautioning that ineffectual competition enforcement has led to "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 commented.
"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), supported the demand for greater regulation, highlighting that digital markets necessitate progressive regulation instead of relying on retrospective enforcement.
"º£½ÇÊÓƵ small businesses understand that competition policy, done correctly, isn't anti-business, it's pro-entrepreneurialism", he stated. "We welcome the push to champion SME dynamism over incumbent protection."
Calls for action mirror global antitrust scrutiny
The IPPR's report arrives amidst escalating international pressure on the market dominance of Apple and Google.
In the US, both tech giants are facing legal challenges.
Significantly, renowned startup accelerator Y Combinator (YC) recently submitted a brief in the US Department of Justice's monopoly case against Google, labelling the company as a "monopolist" whose actions have "stunted the startup ecosystem."
YC's filing accused Google of creating a "kill zone" around emerging markets like AI and web search, thereby discouraging venture capital investment in those sectors.
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."
Google, in a previous blog post, said 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."
