British consumers pay approximately £700m per year to Apple and Google in hidden fees known as the app tax, according to research indicated in reports. Operating an effective duopoly covering at least 90% of UK mobile devices, both technology giants charge developers up to 30% commission on in-app purchases while restricting alternative app distribution channels.
Parliamentary Warning Over the Invisible Mobile Levy
Chi Onwurah, Labour MP for Newcastle upon Tyne Central and West and chair of the parliamentary science, innovation and technology committee, highlighted that the financial burden of these app store commissions stretches far beyond ordinary software transactions. For an average household with four smartphone users, this market control equates to an invisible tax of approximately £55 each year.
Developers face severe barriers under the current operational rules. Software creators cannot bypass the Apple App Store or the Google Play Store on iOS and Android operating systems. Furthermore, both corporations enforce strict “steering” prohibitions, which legally or contractually block developers from informing users that cheaper subscription options or software alternatives exist outside the proprietary storefronts. Small British tech businesses absorb these margin-crushing restrictions, forcing tough choices between hiring engineering talent, investing in product roadmaps, or relocating operations overseas.
Regulatory Powers and Voluntary Commitments
The legislative framework intended to curb these practices arrived when Parliament passed the Digital Markets, Competition and Consumers Act (DMCCA) with cross-party support in 2024. The Act granted the Competition and Markets Authority (CMA) robust statutory authority to mandate behavioral changes across dominant digital platforms. Yet, as detailed by theguardian.com and dailyperkshub.com, the CMA has historically favored weak, voluntary commitments from Silicon Valley over enforceable mandates.
The regulatory body recently closed its consultation period regarding the anti-steering restrictions that currently prevent developers from directing users to external, lower-cost purchasing avenues. Industry observers remain anxious that the watchdog will settle for another voluntary gesture instead of issuing a binding regulatory requirement. This upcoming decision marks an immediate test for the government’s stated goals regarding digital sovereignty and reducing national dependence on overseas infrastructure.
Market Control Versus Developer Survival
Before entering Parliament, Onwurah worked at Ofcom assessing market competitiveness and consumer choice. Data compiled during investigations by the CMA confirm that mobile software distribution in the United Kingdom lacks genuine competition. Without alternative marketplaces on iOS or viable alternative distribution channels on Android, app creators have no leverage to negotiate commission structures. The resulting financial extraction hits domestic startups hardest, directly impacting their ability to scale engineering teams and compete globally.
As the government prepares to rule on the CMA’s next steps regarding app store steering, lawmakers are pushing for strict enforcement of existing statutory powers rather than continued reliance on corporate self-regulation. The unfolding policy decision will establish the baseline for how digital markets operate across the United Kingdom.
