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The iPhone maker may have to allow rivals to run separate application platforms on iPhones in the UK, after a decision from the market watchdog.

This would be a significant change to Apple's well-known "walled garden" where applications can only be downloaded from the company's App Store.

But the UK competition watchdog has designated both the tech giants as having "strategic market status" - effectively saying they have a lot of power over smartphone ecosystems.

Regulatory Assessment

The CMA said the two companies "may be limiting innovation and competition".

But the regulator clarified it did not "find or assume wrongdoing" from the companies.

"The app economy generates 1.5% of the British economy and sustains around 400,000 jobs, which is why it's crucial these markets function properly for enterprises," stated a senior official from the competition authority.

Around ninety to one hundred percent of British smartphones run on the two tech companies' operating systems, creating what the authority calls an "virtual monopoly".

According to current data, 48.5% of British smartphone users use an Apple device - which runs the iOS operating system - with the overwhelming bulk of the rest using the Android OS.

The Company's Response

The regulatory probe focused on how prominent Apple and Google's own applications are versus rivals - as well as their web applications and operating systems.

It is unknown what changes the regulator will look to request, but previously it published roadmaps detailing potential measures it could take.

These include mandating it to be more straightforward for people to transition between iOS and Android phones, and for both companies to rank apps "in a fair, objective and transparent manner" in their marketplaces.

The Cupertino company specifically may be required to permit alternative app stores on its devices, and let people to install apps straight from developer sites.

This would mirror comparable regulations in the European Union, which previously took action against Apple for anti-competitive behaviour.

The technology firm warned the United Kingdom could lose access to receiving updates - as has happened in the EU - which the organization blames on strict rules.

For instance, some AI capabilities which have been launched in other parts of the world are not available in the European market.

"Apple faces intense rivalry in every sector where we operate, and we strive continuously to create the finest offerings, solutions and customer interface," the organization said in a statement.

"The UK's adoption of EU-style rules would undermine that, leaving users with weaker privacy and safety, delayed access to latest functions, and a divided, more complicated experience."

The Search Giant's Position

Android users can presently use alternative marketplaces - though commentators say they are not as user-friendly as Google's own Play Store.

The regulator's plan said the search company may have to "change the user experience" of installing applications directly from websites, as well as "remove user frictions" when using alternative app stores.

"There appears to be no the rationale for today's designation decision," a Google policy executive stated.

The representative said "the majority" of Android users use alternative app stores or install applications straight from a developer's website, and claimed there is a much wider selection of applications available for Android users versus those on iOS products.

"There are now 24,000 Google-compatible devices from thirteen hundred phone manufacturers globally, facing strong rivalry from Apple's platform in the United Kingdom," the representative continued.

Android is an open-source operating system, which means creators can use and build on top of it for free.

The company contends this means it opens up competition.

But advocacy organizations said curbs on these firms' dominance in other countries "are already helping enterprises to innovate and providing customers more choice".

"Their dominance is now causing real harm by limiting options for users and market rivalry for businesses," commented a policy expert.