Think tank tackles proposed regulations on app stores supported by Spotify and Epic


Digital business news

By Chris Cooke | Posted on Tuesday, January 25, 2022

An organization called the Information Technology & Innovation Foundation has written to the US senators behind the proposed Open App Markets Act, insisting that these proposals will achieve the opposite of the stated goals of members of Congress.

The Open App Markets Act aims to regulate app stores — specifically the Apple and Google app stores — and addresses various complaints voiced by app makers, including Spotify and Fortnite maker Epic Games.

In particular, it would force Apple and Google to allow app makers to use and sign alternative payment platforms into their apps, making it easier to circumvent Apple’s own commission-based transaction systems and Google.

Spotify, Epic and many other app makers have accused Google and especially Apple of imposing anti-competitive rules on companies that create apps for use on Android and iOS devices.

One of the senators behind the Open App Markets Act, Richard Blumenthal, said last year that the proposed new laws would “tear down coercive anti-competitive walls in the app economy, giving consumers more choice.” and small tech start-ups a fighting chance”.

He added: “For years, Apple and Google have crushed their competitors and kept consumers in the dark – pocketing big bargains while acting as supposedly benevolent guardians of this multi-billion dollar market. I’m proud to associate myself with the senators [Marsha] Blackburn and [Amy] Klobuchar in this decisive blow against the intimidation of big technologies. This bipartisan bill will help break the ironclad grip of these tech giants, open up the app economy to new competitors, and give mobile users more control over their own devices.”

But the law will actually “damage the app economy, reduce choice, diminish quality and increase costs for consumers,” says the Information Technology & Innovation Foundation, a think tank led by academics and giants. of technology which states that its mission is to “formulate, evaluate, and promote policy solutions that accelerate innovation and drive productivity to drive growth, opportunity, and progress”.

In an open letter to senators, ITIF challenges the premise that the app market is not competitive, noting that while Google and Apple may fundamentally have a duopoly when it comes to apps in the United States, a duopoly does not is not a monopoly.

Additionally, globally, there are other app stores in the market, many of which are run by Chinese tech giants like Tencent and Alibaba. Of course, this kind of ignores the fact that, for an iPhone owner, Apple has a monopoly on apps, but the argument is that any app buyer with an iPhone who’s pissed off by this should just buy a different phone.

“By targeting Apple’s App Store and Google’s Play Store,” ITIF writes, “the Open App Markets Act will harm a vibrant app economy that currently benefits app developers and consumers and bills itself as one of America’s flagship digital innovations – only to give unregulated Chinese app stores a comparative advantage over US-based app stores Senators shouldn’t try to fix an economy of applications that is not broken”.

Elsewhere, the letter claims there’s plenty of choice in the market, firstly because there are millions of apps to choose from, and – when it comes to app stores – Google and Apple have slightly different policies regarding the extent to which they control the app experience on their respective devices.

Therefore, customers have a choice when it comes to choosing between an Android or iOS phone. And under the Open App Markets Act, Apple would have to adopt policies more similar to those of Google, thereby reducing competition. Yeah whatever.

“By ensuring that users can only install approved apps from its App Store, Apple is prioritizing user privacy and security,” the letter said. “In contrast, by allowing users to install all apps on their devices, even those that are not approved for the Google Play Store, Google is prioritizing user personalization. Unfortunately, the bill will offer fewer choice for app developers and consumers, as the forced open will align Apple’s approach with Google’s.”

So far not very convincing. Perhaps with that in mind, the letter also emphasizes Apple’s main argument for its strong App Store policies, which is that it stands up for privacy and security. users.

“Perhaps the most concerning aspect of the bill,” the letter adds, “is that it will lead to substandard apps: as the bill imposes a wide range of precautionary obligations preventing stores from apps to control scams, malware, and other shoddy apps, consumers will download apps that at best don’t provide a satisfactory quality of service, and at worst deliver them viruses, among other nuisances “.

The letter concludes: “The Open App Markets Act attempts to achieve a state of perfect competition in the app economy against the inevitable network effects that characterize and drive value for app stores. This attempt would fall short of the bill’s stated goals and instead reduce the overall efficiency of the app economy, leaving everyone worse off – consumers, app developers, digital ecosystems, and U.S. leadership in matters. of digital innovation. A much more reasonable approach is warranted.”

LEARN MORE ABOUT: Apple | Google | Information Technology and Innovation Foundation | Open Application Markets Act


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