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Apple could be required to permit competitors to run their own app stores on iPhones in the UK, following a ruling from the market watchdog.

This represents a significant change to Apple's infamous "closed system" where apps can only be downloaded from the company's official marketplace.

But the Competition and Markets Authority has designated both Apple and Google as having "dominant market position" - indicating they have a lot of power over smartphone ecosystems.

Regulatory Assessment

The regulator said the two companies "could be restricting innovation and competition".

But the regulator clarified it did not "determine or presume wrongdoing" from the firms.

"The app economy generates one and a half percent of the UK's GDP and supports around four hundred thousand positions, which is why it's crucial these markets work well for business," commented a top executive from the CMA.

Around ninety to one hundred percent of British smartphones run on Apple or Google's mobile platforms, creating what the regulator calls an "virtual monopoly".

According to recent analysis, 48.5% of British smartphone users own an iPhone - which runs the iOS operating system - with the overwhelming bulk of the rest using Google's Android.

The Company's Response

The regulatory probe focused on how dominant Apple and Google's own applications are versus competitors - as well as their browsers and operating systems.

It is unclear what changes the regulator will look to request, but previously it published guidelines detailing possible actions it could take.

These comprise mandating it to be more straightforward for people to switch between iOS and Android devices, and for both firms to list applications "fairly and openly" in their app stores.

Apple particularly may be compelled to permit third-party marketplaces on its devices, and let people to install apps directly from developer sites.

This would mirror comparable regulations in the EU, which previously took action against the company for anti-competitive behaviour.

Apple cautioned the UK could lose access to receiving updates - as has occurred in the European Union - which the company attributes to heavy regulation.

For instance, some AI features which have been rolled out in other parts of the world are not accessible in the EU.

"We faces fierce competition in every sector where we operate, and we work tirelessly to create the best products, services and user experience," the company said in a release.

"The UK's adoption of European regulations would weaken that, resulting in consumers with weaker privacy and safety, slower availability to new features, and a fragmented, less seamless user journey."

The Search Giant's Position

Google device owners can currently use third-party app stores - though critics say they are not as user-friendly as the company's official application marketplace.

The CMA's roadmap said Google may have to "change the user experience" of installing applications straight from online sources, as well as "remove user frictions" when using third-party platforms.

"We simply do not see the rationale for today's designation decision," a Google competition lead stated.

The executive said "the majority" of Android users use third-party platforms or download apps directly from a developer's website, and claimed there is a far greater range of applications available for Google device owners versus those on iOS products.

"Currently available are 24,000 Android phone models from thirteen hundred phone manufacturers worldwide, facing strong rivalry from Apple's platform in the UK," the representative added.

Android is an open-source operating system, which means developers can use and build on top of it for no cost.

The company argues this means it promotes market competition.

But consumer groups said restrictions on these companies' power in other countries "currently assist enterprises to develop and giving customers more options".

"The companies' control is now creating genuine problems by restricting choice for users and competition for businesses," commented a consumer advocate.