The UK may launch a competition investigation into Apple and Google's dominant mobile ecosystems.

• An independent inquiry group of the U.K.'s Competition and Markets Authority issued a report on Friday, recommending that the watchdog investigate Apple and Google's activities in mobile ecosystems.
• The DMCC recommends the CMA to investigate U.S. tech giants under the new U.K. law.
• The CMA has been granted the authority by the DMCC to implement significant changes in behavior to combat anti-competitive practices in digital markets.

The U.K.'s mobile web browsers and apps could face a competition investigation into their dominance, with London being one of the potential targets.

An independent inquiry group, appointed by the U.K.'s Competition and Markets Authority, issued a provisional decision on Friday regarding an in-depth review of the mobile browser markets.

The DMCC, a new U.K. law set to take effect next year, aims to prevent anti-competitive behavior in digital markets, and the group in the report recommended that the CMA investigates Apple and Google's activities in mobile ecosystems under this law.

The DMCC is equivalent to the Digital Markets Act in the European Union in that it empowers the CMA to label companies as possessing "Strategic Market Status" (SMS), indicating their substantial market influence in a specific digital industry.

The CMA has the power to enforce significant changes in behavior on firms with SMS status, such as prohibiting self-preferencing of their own services, mandating interoperability, and banning anti-competitive practices.

To give a firm SMS status, the CMA must conduct a formal investigation.

The CMA inquiry group expressed concern that Apple's App Store rules limit competitors from introducing innovative features that could benefit consumers, such as faster webpage loading on iPhone apps.

Many U.K. developers expressed interest in using "progressive" web apps, which enable companies to provide apps without an app store, but they noted that this technology does not fully take off on iOS devices.

The group concluded that the revenue-sharing agreement between Google and Apple to make Google the default search engine on iPhone significantly decreases their financial motivation to compete in mobile browsers on iOS.

"According to Margot Daly, chair of the CMA's independent inquiry group, "Markets thrive when businesses can innovate and offer new options to consumers. However, competition among mobile browsers is not effective, which is hindering innovation in the U.K.""

Apple and Google were not immediately available for comment when contacted by CNBC.

The CMA group had initially examined restrictions on gaming services distribution on Apple's mobile app platform. However, they have now dropped this aspect of their investigation after the U.S. tech giant permitted cloud gaming services on the App Store.

The regulator expects to make a final decision in March 2025 and has invited interested parties to share their comments on its provisional findings until Dec. 13.