Online communications services are more popular than ever and many are expanding the services they offer their users. There is a possibility this trend could lead to the development of so-called ‘super-apps’, offering a range of services and functionalities. Sunny Shergill and Nick Evans from Ofcom’s Strategy and Policy team discuss what this could mean for how we use online services and how Ofcom is responding to any regulatory issues that could arise.
Online communications services (OCS) include standalone apps and websites which provide private messaging and calling services as their primary purpose, such as WhatsApp and Snapchat. They also include services that offer instant messaging as part of a broader social media platform, such as Facebook and Instagram.
These services are more popular than ever. Our latest Online Nations report showed that the most popular services, WhatsApp and Facebook Messenger, were used by 85% and 70% of online adults respectively. For many people they are even replacing traditional communications services; our research has shown that around two-thirds of people aged 16 to 44 said they would rather go without mobile phone calls for 24 hours than go without their favourite messaging apps.
Expansion of online services could lead to ‘super-apps’
When Elon Musk bought Twitter (now X) in 2022, he shared his ambitions to turn it into an ‘everything app’. This follows similar trends from other online services expanding the scope of services on their platforms. For example, Facebook has introduced shoppingand gaming, Apple allows you to send and receive money through Apple Cash on the Messages app and Uber now offers not only car rides but grocery delivery and travel reservations. All of this suggests a trend towards wider service scope.
This trend could lead to ‘super-apps’, all-in-one applications offering a range of services and functionalities, such as payment processing, e-commerce and communications. Super-apps are already hugely popular in Asia. Examples include WeChat in China, which has more than one billion monthly active users; KakaoTalk which is used by 90% of South Korea’s population, and Grab, which has pushed Uber out of its market position in South East Asia. These apps often include ‘mini programs’ – light apps, sometimes offered by third parties, offering additional services. WeChat has over one million mini-programs, including Government services. Analysts from Gartner predict that by 2027, more than 50% of the global population will be daily active users of multiple super-apps.
It is unclear to what extent users in the West would find a super-app useful or if they would trust a single app to fulfil so many services. This is partly because they are accustomed to using multiple apps and many services are arguably entrenched. While these factors make the development of Western super-apps less certain, if they were to take-off in the UK, this would be a significant shift in how consumers live their lives online. So, it’s important regulators, including Ofcom, consider the implications.
The potential rise of super-apps raise specific issues for regulators
Online communications services currently fall under our remit as the regulator for online safety. We are looking at how illegal harms can manifest on these services in our Illegal harms consultation and will recommend the steps that online services could take to mitigate the risk of illegal harms. If super-apps were to emerge, they would likely involve a wider range of functionalities, which could potentially increase the risk of users being exposed to harm online. For example, bringing e-commerce within messaging apps could potentially increase the risk of fraud, phishing and scams.
From a competition perspective, our assessment is that although there are some competition risks to users, OCS are currently driving broadly positive outcomes for users (this was a high-level assessment and did not consider areas such as online harms or wider platform ecosystems). However, the emergence of super-apps could raise new competition concerns. For example, if customers rely on super-apps for multiple important functions, it might make it difficult for them to switch from one to another. This might in turn make it harder for new entrants to attract users. In addition, super-apps might be able to give favourable treatment to their own services and only allow third-party services to integrate if they are not close competitors. However, these issues may be mitigated somewhat if super-apps allow a sufficient degree of interoperability – a topic we discuss in more detail in our recent discussion paper.
The resilience of OCS is already important, as a lot of people rely on them to communicate. This is even more important for super-apps, as they are used for a wider range of purposes. This can be seen by the significant impact of the days-long outage of South Korean super-app, KakaoTalk.
The broad scope of super-apps could increase privacy risks, as the centralisation of data and systems could increase the seriousness of breaches. However, super-apps might have benefits for privacy. For example, they could enable a centralised consent management process or interface, rather than users having to manage their privacy preferences across multiple different apps.
It is important that regulators continue to monitor the development of online communications services, as well as the potential development of super-apps – and they should consider the associated regulatory issues. Some of these issues might be more relevant to the remits of other regulators. For example, data and privacy issues are relevant to the Information Commissioner’s Office (ICO), and matters relating to competition would be relevant to the Competition and Markets Authority (CMA), as touched on in the CMA’s Horizon Scanning Report. Given the importance of this trend and its potential impact on the communications sector, we will continue to monitor for new developments, while also working with our partners in the Digital Regulation Cooperation Forum to consider any emerging issues.
