The EdTech sector's new opportunity

For the EdTech sector in the UK, an intriguing opportunity is emerging. The ability to drive smartphone users from general platform stores – Google and Apple - to more specialised platforms. This could lead to EdTech-based stores becoming a reality. It means that offering a one-stop shop for education apps is now feasible. This shift could significantly enhance the accessibility and convenience of educational resources for users.

The development will follow a proposal published recently by the Competition and Markets Authority (CMA) to designate Apple and Google as having strategic market status in relation to their app platforms. 

CMA can make a proposal of this kind as a result of powers provided under the Digital Markets Competition and Consumers Act 2024. A final decision is due by no later than 22nd October.

To designate a business as having strategic market status, CMA must first define exactly which part of the business should carry that status. It must then satisfy itself that the business holds substantial and entrenched market power and enjoys a position of strategic significance. An evidence led approach must be taken. Should that lead to a conclusion that the requirements to designate a business activity as having strategic market status are satisfied, CMA may then issue conduct requirements (rules that the organisation must comply with when doing business with third parties) to be observed by the affected business.

From a legal perspective, this development raises several important considerations. The CMA's scrutiny is crucial to ensuring that there is a level playing field in the EdTech sector. CMA aims to prevent monopolistic practices and ensure that consumers have access to a diverse range of apps. This involves assessing whether the platform operators offer fair and transparent terms to app developers and whether they provide adequate support for smaller developers to thrive.

What should we expect as an outcome from this process?

It’s important to appreciate that both Apple and Google have experienced this process before. The UK is following a path already travelled by these companies in the European Union. The expectations that we are likely to see made of these platforms by CMA include:

• Access to IOS features for all app developers
• Faster and fairer app approval procedures
• Freedom to use alternative payment systems
• Improved data portability and access
• Less ability to self-preference for Apple and Google business interests

How might Apple and Google respond?

Whilst CMA intervention carries benefits for developers and others in the ecosystem, an SMS decision will also carry consequences if the position in the EU is replicated. By way of example, Apple has responded to the equivalent designation in the EU by introducing new fee structures and compliance requirements for developers who choose to use alternative payment systems. Commission charges are still permitted and charged to the app publisher.

Whilst not yet in effect, the likelihood of the proposals being confirmed as a decision of CMA in each case is very high – giving app developers, publishers and content providers time now to prepare for new opportunities. Importantly, CMA will also be discussing with Apple and Google the framing of the likely conduct requirements with stakeholder consultation also occurring. Taking the opportunity to be part of that process is recommended – reaching out to CMA through mobilesms@cma.gov.uk may prove to be a useful step to take at this time.