UK app store dominance costs consumers £700m a year, research estimates
Apple and Google’s control of the main app stores lets them charge developers commissions of up to 30% on in-app purchases and restrict them from directing customers to cheaper options elsewhere. The article argues this lack of competition raises costs for consumers and makes it harder for British app businesses to grow.
The Competition and Markets Authority says Apple and Google’s mobile platforms run on at least 90% of UK mobile devices, leaving developers with few practical alternatives. Research commissioned by the Coalition for App Fairness estimates British consumers pay the companies about £700m a year, or roughly £55 annually for a household with four smartphone users; the CMA is considering rules on “steering” after receiving consultation responses.
- Apple and Google charge app developers commissions of up to 30%.
- Their platforms run on at least 90% of UK mobile devices.
- The CMA is considering whether developers can point users to cheaper options.
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Apple and Google run the main digital marketplaces where people download apps on to their smartphones. This means most app developers have little choice but to sell digital goods and services through these platforms.
When people make purchases through apps using Apple and Google's payment systems, the companies take a commission of up to 30%. The companies also prevent app makers from telling customers about cheaper options elsewhere, a restriction known as "steering". Critics argue this lack of competition means consumers end up paying more than they would in a genuinely competitive market.
Apple and Google's platforms are used on over 90% of UK mobile phones, leaving developers with little practical alternative to using their stores. The Competition and Markets Authority, the UK's competition regulator, is considering rules that would allow app makers to direct users to cheaper purchasing methods. Such changes could affect pricing for digital services and the commercial options available to app developers.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Apple and Google's 90%+ market share eliminates meaningful competition for developers, who have no practical alternative to accepting 30% commissions on in-app purchases. These costs are passed directly to consumers, resulting in an estimated £700m annual cost to British households, whilst restrictions on steering prevent any price competition or consumer awareness of cheaper alternatives. This locked market harms consumer welfare and British app businesses' ability to compete internationally.
The case against
Apple and Google provide substantial platform infrastructure—including payment processing, fraud prevention, security controls, customer support, and quality curation—that justify industry-standard 30% commissions comparable to console stores. Steering restrictions protect users from fraudulent external payment systems and maintain platform integrity, which matters more than steering users away. Developers retain viable alternatives including web applications, direct distribution, and cross-platform competition between iOS and Android, so the platforms reflect genuine service costs rather than preventing market entry.
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Originally published by The Guardian as “Own a mobile phone? Then you’re paying the ‘app tax’. It’s a racket and it’s time the UK faced Apple and Google down | Chi Onwurah”.