What is a market investigation?
A market investigation is carried out where there are concerns that markets may not be working well, to find out why and consider what, if any, remedial action can be taken to address concerns.
Market investigations can impose a significant burden on business, both in terms of the information requested by the CMA and the requisite management time involved, particularly in light of the risk of structural divestments or stringent behavioural remedies being imposed.
Why was a market investigation into cloud gaming and mobile browsers launched?
The CMA's decision to open an in-depth investigation follows a market study conducted last year, which found that, within their respective mobile ecosystems, Apple (iOS) and Google (Android) have substantial and entrenched market power over the key gateways through which users access content online through their mobile devices. According to the CMA, this control over their mobile ecosystems puts them in a powerful position, allowing them to determine the ‘rules of the game’ and making it difficult for rival businesses to compete.
What will the market investigation focus on?
The market investigation will focus on the supply of mobile browsers and browser engines; and the distribution of cloud gaming services through app stores on mobile devices.
With respect to cloud gaming, the focus of the investigation will be on the access that such services have to app stores on mobile devices so that growth is not hampered in this sector and UK gamers do not "miss out". Sarah Cardell, interim Chief Executive of the CMA, said: "We want to make sure that UK consumers get the best new mobile data services, and that UK developers can invest in innovative new apps."
The CMA has also commented that it will be able to tackle these issues most effectively through its anticipated new powers under the Digital Markets, Competition and Consumer Bill. However, in the meantime, the CMA will use its existing powers to deliver one-off interventions in digital markets, where these are necessary to improve outcomes for UK consumers and businesses.
What is next?
The market investigation will involve an 18-month (extendable to 24 months) investigation, at the end of which the CMA has the power to impose remedies on businesses and/or make recommendations to other bodies such as sectoral regulators or the Government – when legislation might be required for example.
Our expert team of lawyers have extensive experience in market studies and investigations across the UK and Europe.
Our knowledge of regulators’ processes and priorities mean that businesses can rely on our advice about the types of analysis, evidence, and arguments that will have the greatest impact.
For more information, please contact John Cassels, Asfand Gulzar or Andrea Carrera.
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