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

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

But the UK competition watchdog has designated both Apple and Google as having "dominant market position" - effectively saying they have a lot of power over smartphone ecosystems.

Watchdog Findings

The regulator said the two companies "may be limiting innovation and market rivalry".

But the regulator emphasized it did not "determine or presume misconduct" from the firms.

"The app economy generates 1.5% of the UK's GDP and sustains around 400,000 jobs, which is why it's crucial these sectors work well for business," commented a senior official from the competition authority.

Approximately 90-100% of British smartphones run on the two tech companies' operating systems, creating what the regulator calls an "virtual monopoly".

Based on recent analysis, nearly half of UK mobile owners own an Apple device - which runs Apple's iOS - with the vast majority of the rest using Google's Android.

The Company's Reaction

The CMA's investigation examined how dominant Apple and Google's own apps are versus rivals - as well as their web applications and operating systems.

It is unclear what modifications the authority will seek to implement, but earlier it published roadmaps outlining possible actions it could take.

These include mandating it to be more straightforward for people to transition between Apple and Android devices, and for both firms to list applications "in a fair, objective and transparent manner" in their marketplaces.

Apple particularly may be compelled to allow third-party marketplaces on its products, and enable people to install apps straight from developer sites.

This would mirror comparable regulations in the EU, which previously took action against Apple for restrictive practices.

Apple warned the United Kingdom could lose access to receiving updates - as has occurred in the European Union - which the organization blames on heavy regulation.

For example, some AI features which have been launched in other regions are not accessible in the European market.

"Apple encounters intense rivalry in every market where we operate, and we strive continuously to create the finest offerings, solutions and user experience," the company said in a statement.

"The UK's adoption of EU-style rules would undermine that, resulting in consumers with reduced data protection and security, slower availability to latest functions, and a fragmented, less seamless experience."

The Search Giant's Position

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

The regulator's plan said Google may have to "change the user experience" of downloading apps directly from websites, as well as "eliminate barriers" when using alternative app stores.

"There appears to be no the rationale for the current classification," a Google competition lead remarked.

The executive said "most" of Android users use third-party platforms or download apps straight from a creator's site, and claimed there is a far greater range of apps offered for Android users compared to those on Apple devices.

"Currently available are 24,000 Android phone models from 1,300 phone manufacturers worldwide, facing intense competition from iOS in the United Kingdom," the representative continued.

Google's platform is an freely available software, which means developers can utilize and develop on top of it for no cost.

The company contends this means it promotes competition.

But consumer groups said curbs on these companies' power in other countries "currently assist enterprises to innovate and providing customers more choice".

"The companies' control is now creating genuine problems by limiting options for users and market rivalry for businesses," stated a consumer advocate.