LONDON, Oct 23: Britain's competition watchdog said Wednesday that Apple and Google would face tougher regulation of services on their mobile platforms under new measures focused on technology giants.
The Competition and Markets Authority said it was placing the two companies under "strategic market status" in a final decision following a nine-month investigation.
The companies hit out at the SMS designation, with Google calling it "disappointing, disproportionate and unwarranted".
The new UK measures are similar to a tech competition law from the European Union, the Digital Markets Act, which carries the potential for hefty financial penalties.
"Apple and Google's mobile platforms are used by thousands of businesses right across the economy... but the platforms' rules may be limiting innovation and competition," Will Hayter, executive director for digital markets at the CMA, said in a statement.
The CMA previously described their dominance as "an effective duopoly," noting that virtually all mobile phones sold in the UK are pre-installed with either Apple's iOS operating system of Google's Android system.
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In addition, their "app stores and browsers have either exclusive or leading positions on their platforms compared to alternative products and services", it said.
An SMS designation allows the CMA to require Apple and Google to change how certain mobile services operate, with the aim of offering consumers greater choice.
UK regulators opened the investigation into Apple and Google's control over mobile ecosystems in January.
- 'Weaker privacy' -
Google said the regulator's conclusion impacts its Android operating system, Play online store and Chrome browser.
"Following the CMA's decision today, our mobile business in the UK faces a set of new -- and, as of yet, uncertain -- rules," said Oliver Bethell, senior competition director at Google.
"The CMA's next steps will be crucial if the UK's digital markets regime is to meet its promise of being pro-growth and pro-innovation," he said.
Apple said the "UK's adoption of EU-style rules would undermine" its objective to "create the best products, services and user experience".
It also warned that users would face "weaker privacy and security, delayed access to new features, and a fragmented, less seamless experience".
"We've seen the impact of regulation on Apple users in the EU, and we urge the UK not to follow the same path," it said.
Wednesday's announcement comes after Google this month was given SMS designation for its dominance in online search, with the CMA still consulting over the exact rules to impose.
Google has warned that unfavourable regulation could slow the launch of new products in the UK.
The company last month announced a £5 billion ($6.7 billion) investment in the UK over the next two years to help power the country's AI drive.
Google employs more than 7,000 people in the UK, and Apple almost 8,000.
