The United Kingdom's next Prime Minister will face a significant challenge in regulating the dominance of Apple's App Store and Google Play, according to the Coalition for App Fairness (CAF). Dominic Fean, a spokesman for CAF, stated that the current practices of these tech giants create a monopolistic environment that is detrimental to small developers and consumers alike.
Fean described the commissions charged by Apple and Google on digital goods and services as an 'app tax,' with rates often reaching up to 30 percent of sales. This practice, he argues, is unlike anything tolerated in other business sectors, where credit card processing fees typically range from 1 to 3.5 percent. While exemptions exist for physical goods purchased through apps, digital downloads and in-app purchases are subject to these substantial fees.
This 'app tax' disproportionately affects small British developers, who have limited options for distributing their software due to the near-monopoly held by Apple and Google. Over 95 percent of UK mobile phones run on either the Android or iOS operating systems, compelling app makers to comply with the tech giants' terms. Even with discounted rates for smaller businesses, typically 15 percent, the costs are often too high to sustain growth or investment.
Developers also face restrictions on how they communicate with customers and implement payment systems. While Google plans to introduce terms allowing developers to direct customers off-app for payments, it still intends to take a revenue cut. CAF believes these high commissions ultimately lead to increased costs for consumers.
A 2025 report by the think tank IPPR estimated that reducing the marketplace cut to 5 percent could result in a £1.2 billion to £2 billion boost for UK app developers. CAF has been campaigning against these fees since 2020, advocating for further reductions that would foster developer growth, job creation, and consumer benefits.
The UK government has provided regulators with new powers to intervene. The Competition and Markets Authority (CMA) is expected to announce a consultation on new conduct requirements for Google and Apple. This could compel the tech companies to permit app makers to process payments directly and steer users outside of their app stores with minimal or no additional cost.
CAF suggests that if the government takes decisive action to promote competition, the UK could become a more attractive hub for software developers globally, nurturing local talent and attracting startups. Conversely, allowing the current situation to persist could harm the digital economy and disadvantage consumers.