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The iPhone maker may have to allow rivals to run their own app stores on iPhones across Britain, after a ruling from the market watchdog.

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

But the Competition and Markets Authority has designated both the tech giants as having "strategic market status" - effectively saying they have significant control over mobile platforms.

Watchdog Assessment

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

But the regulator emphasized it did not "find or assume misconduct" from the firms.

"Mobile applications generates one and a half percent of the British economy and sustains around 400,000 jobs, which is why it's essential these markets function properly for enterprises," stated a senior official from the competition authority.

Approximately 90-100% of UK mobile devices run on the two tech companies' operating systems, creating what the authority calls an "virtual monopoly".

According to recent analysis, 48.5% of UK mobile owners own an Apple device - which runs Apple's iOS - with the vast majority of the remaining users using Google's Android.

Apple's Reaction

The regulatory probe examined how dominant the companies' own apps are versus competitors - as well as their browsers and platform software.

It is unknown what modifications the authority will look to request, but earlier it published guidelines detailing potential measures it could take.

These comprise mandating it to be more straightforward for people to switch between Apple and Android phones, and for both firms to rank apps "fairly and openly" in their marketplaces.

Apple specifically may be required to allow alternative app stores on its products, and enable people to install apps directly from companies' websites.

This would follow comparable regulations in the EU, which previously took action against the company for anti-competitive behaviour.

The technology firm warned the UK could lose access to getting new features - as has occurred in the European Union - which the organization attributes to strict rules.

For example, some AI features which have been launched in other parts of the world are not accessible in the EU.

"Apple faces intense rivalry in every market where we operate, and we strive continuously to create the best products, services and customer interface," the organization said in a statement.

"Britain's implementation of EU-style rules would undermine that, resulting in consumers with reduced data protection and security, delayed access to latest functions, and a divided, less seamless user journey."

Google's Position

Android users can presently use third-party app stores - though critics say they are not as smooth as Google's own application marketplace.

The regulator's plan said Google may have to "modify the interface" of installing applications directly from websites, as well as "remove user frictions" when using third-party platforms.

"We simply do not see the rationale for the current classification," a Google competition lead stated.

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

"Currently available are 24,000 Google-compatible devices from thirteen hundred device makers worldwide, facing strong rivalry from Apple's platform in the United Kingdom," the spokesperson continued.

Google's platform is an open-source operating system, which means developers can use and build on top of it for no cost.

Google argues this means it opens up competition.

But consumer groups said restrictions on these companies' power in other countries "currently assist enterprises to innovate and giving customers more options".

"The companies' control is now causing real harm by limiting options for users and competition for companies," stated a consumer advocate.