US legislation has Apple, Google Play app stores in crosshairs with ‘fair, clear, and enforceable rules’

Several US senators have introduced a bill, known as the Open App Markets Act, aimed at loosening Apple and Google’s current stranglehold on the app economy.

Guest post by Emmanuel Legrand of the Legrand Network

US Senators Richard Blumenthal (D-CT), Marsha Blackburn (R-TN), and Amy Klobuchar (D-MN) have introduced a bill, the Open App Markets Act, which seeks to “promote competition and reduce gatekeeper power in the app economy, increase choice, improve quality, and reduce costs for consumers.”

  The Open App Markets Act is targeted at Google and Apple, whose respective app stores are the market leaders in the Android and iOS eco-systems. 

  The two companies are described as having “gatekeeper control of the two dominant mobile operating systems and their app stores that allow them to exclusively dictate the terms of the app market, inhibiting competition and restricting consumer choice.”

Break tech giant’s grip on the app economy

  Blumenthal said that the bipartisan bill “will help break these tech giants’ ironclad grip, open the app economy to new competitors, and give mobile users more control over their own devices.” 

  In a statement, Apple said it would continue to focus on connecting developers with consumers: “Since our founding, we’ve always put our users at the center of everything we do, and the App Store is the cornerstone of our work to connect developers and customers in a way that is safe and trustworthy. The result has been an unprecedented engine of economic growth and innovation, one that now supports more than 2.1 million jobs across all 50 states. At Apple, our focus is on maintaining an App Store where people can have confidence that every app must meet our rigorous guidelines and their privacy and security is protected.”

  The new law – which would only apply to “any person that owns or controls an App Store for which users in the United States exceed 50,000,000” – has the ambition to set “fair, clear, and enforceable rules” that will “protect competition and strengthen consumer protections within the app market,” according to a joint statement by the three Senators.

Provide guidelines for app tores

  According to the law, an app store, described in the bill as a “Covered Company,” will not be able to:

  (1) Require developers to use an In-App Payment System owned or controlled by the Covered Company or any of its business partners as a condition of being distributed on an App Store or accessible on an operating system; 

  (2) Require as a term of distribution on an App Store that pricing terms or conditions of sale be equal to or more favorable on its App Store than the terms or conditions under another App Store; or 

  (3) Take punitive action or otherwise impose less favorable terms and conditions against a devel- oper for using or offering different pricing terms or conditions of sale through another In-App Payment System or on another App Store.

Tear down anticompetitive walls

  “This legislation will tear down coercive anticompetitive walls in the app economy, giving consumers more choices and smaller startup tech companies a fighting chance,” said Blumenthal. “For years, Apple and Google have squashed competitors and kept consumers in the dark—pocketing hefty windfalls while acting as supposedly benevolent gatekeepers of this multi-billion dollar market. I’m proud to partner with Senators Blackburn and Klobuchar in this breakthrough blow against Big Tech bullying.”

Added Blackburn: “Big Tech giants are forcing their own app stores on users at the expense of innovative start-ups. Apple and Google want to prevent developers and consumers from using third-party app stores that would threaten their bottom line. Their anticompetitive conduct is a direct affront to a free and fair marketplace. Senator Blumenthal, Klobuchar, I are committed to ensuring US consumers and small businesses are not punished by Big Tech dominance.”   Klobuchar said that “a few gatekeepers control the app marketplace, wielding incredible power over which apps consumers can access,” and that this situation “raises serious competition concerns.” She added: “By establishing new rules for app stores, this legislation levels the playing field and is an important step forward in ensuring an innovative and competitive app marketplace.”  

Protect developers’ rights

 The co-sponsors of the Bill explain that the Open App Markets Act would:

  > protect developers’ rights to tell consumers about lower prices and offer competitive pricing; protect side-loading of apps; 

  > open up competitive avenues for startup apps, third party app stores, and payment services; 

  > make it possible for developers to offer new experiences that take advantage of consumer device features; give consumers more control over their devices; prevent app stores from disadvantaging developers; 

  > and set safeguards to continue to protect privacy, security, and safety of consumers. 

Greater consumer choices

 The Open App Markets Act has been endorsed by a number of technology and consumer groups, including Consumer Reports, Internet Accountability Project, Public Citizen, Coalition for App Fairness, Color Of Change, News Media Alliance, Public Knowledge, Lincoln Network, Consumer Action for a Strong Economy (CASE), Digital Progress Institute, Electronic Frontier Foundation, American Principles Project, and the American Economic Liberties Project.

 “The Open App Markets Act will ensure fairness for both users and developers without forcing security or privacy compromises, resulting in greater consumer choices and lower prices in the app ecosystem,” said John Bergmayer, Legal Director at Public Knowledge. 

 In an interview with Reuters, Blumenthal said that he expected a companion legislation to be introduced in the House of Representatives “very soon.”