In Shocking News, The ACCC Thinks Apple And Google’s App Stores Need Regulating

In Shocking News, The ACCC Thinks Apple And Google’s App Stores Need Regulating

The Australian Competition & Consumer Commission (ACCC) has said that Apple and Google’s apps stores may need to be regulated if significant changes aren’t introduced.

The ACCC reckons Apple and Google’s app stores probably need regulating, hey

The ACCC’s second Digital Platform Services report has found that measures need to be put in place to address the market power Apple and Google have in the app space.

Apple and Google cornering the market? A revelation, truly.

This is part of a five-year enquiry into digital platforms operating within Australia and their impact on consumers as well as competition in market.

According to ACCC Chair Rod Sims, this is because apps are intertwined in so many aspects of the lives of Australians, and the App Store and Google Play are largely where these apps live.

“Apple and Google’s stores are the gateways between consumers and app developers, and it’s true that they provide considerable benefits to both groups. But there are significant issues with how this market is operating,” Sims said in a statement.

Sims also pointed out that in addition to operating these marketplaces, Apple and Google also compete with third party apps with their own. And this can be problematic.

“They have the ability and incentive to promote their own apps over others, and they control the terms that their competitors must comply with to gain access to their stores,” Mr Sims said.

“Apple and Google should also be prevented from using information collected about third-party apps to advantage their own competing apps.”

Due to the ACCC’s findings in the digital platform services report, the consumer watchdog believes that app developers should be provided with more information regarding app discoverability on these platforms.

It also believes that customers should have the option to change or remove default and pre-installed apps.

It also mentioned a familiar payment restriction issue

Another issue the ACCC rose was a familiar one — payment restrictions.

“The ACCC is also concerned with restrictions imposed by Apple and Google which mean developers have no choice but to use Apple and Google’s own payment systems for any in-app purchases,” Sims said.

Both Apple and Google are currently in legal battles with Epic Games over this exact issue.

In 2020 the companies removed Fortnite from their respective app stores after Epic allowed players to purchase in-game currency directly from the mobile apps on iOS and Android.

This was a big deal because it enabled user to skip the regular in-app payment method that Apple gets a 30 per cent cut of. Epic further enticed players to pay directly by offering a 20 per cent discount on this payment method.

Once the game was removed, Epic filed lawsuits against Apple and Google for “anti-competitive restrictions”. This is also known as the Apple Tax, which has been gaining negative attention since 2020.

Epic also filed lawsuits against Apple and Google in Australia but they have been granted a temporary stay until after the US trials conclude.

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The ACCC has a few suggestions

In response to the report’s findings, the ACCC has made some suggestions that Apple and Google could implement

This includes the following:

  • Allow consumers  to rate and review all apps
  • Give consumers the ability to change any pre-installed default app on their device.
  • Allow app developers to provide consumers with information about alternative payment options.
  • That any information collected by Apple and Google in their capacity as app marketplace operators can’t be used to the advantage of their own apps.

“We have identified a number of areas where action is required and have put forward potential measures to address areas of particular concern,” Sims said.

“There is a window of opportunity for Apple and Google themselves to take steps to improve outcomes for app developers and consumers by adopting the potential measures we have identified,”

“The ACCC will also take into account significant proposals and law changes in other countries which have identified similar concerns. Regulation may be required if Apple and Google fail to take steps to address the concerns identified.”

Disclosure: the author owns shares in Apple.