The US Department of Commerce is calling on Congress to help expand the mobile app store market.
In a new report, the department’s National Telecommunications and Information Administration (NTIA) accused Apple and Google of having individual monopolies on app stores for mobile devices, saying they both “play a significant gatekeeping role by controlling (and restricting) how apps are distributed.”
The report claims that through their respective iOS and Android stores, both companies created rules that developers are forced to comply with if they want their apps to release on either storefront. As a result, it’s lead to a “less competitive ecosystem,” and difficult for apps to be fully released on third-party app stores.
NTIA’s report further argues that the review processes both tech companies have for apps, and restricting how apps function, further harms both developers and consumers alike.
“While the current app store policies do offer some benefits to consumers, including the potential for tighter security controls, the report found that the costs far outweigh the benefits and that privacy and security protections can still be achieved in a more competitive environment,” wrote NTIA.
The National Economic Council’s deputy director Bharat Ramamurti backed the organization’s report, saying it would be an effective tool that “will benefit consumers, startups, and small business. This report identifies important ways we can promote competition and innovation in the app market.”
Outside of the US, Europe addressed the third-party store concern in 2022 with its Digital Markets Act. Google has already complied with Europe’s law, and Apple will tweak its app store for Europe beginning in 2024.
NTIA’s plans for app stores may vindicate Epic Games
Through a four-part plan, NTIA hopes to allow for more choice in the mobile marketplace and in turn give consumers more control over their mobile devices.
As part of its recommendations to expand the mobile app space, NTIA recommended that app store creators shouldn’t be allowed to give their proprietary apps special treatment in search results. Further, store operators would have to pull back its restrictions on alternate app stores and web apps.
Each of the changes suggested by NTIA would involve agencies like the FTC and Justice Department. Both organizations have recently taken steps to push back against mergers in the tech industry, such as filing injunctions against Meta and lawsuits against Microsoft as it attempts to acquire Activision Blizzard.
These suggestions would also require new legislation and extra antitrust enforcement. NTIA argued that its measures “would put fairer rules in place in the mobile app ecosystem, to the benefit of consumers and competition.”
It’s also worth noting that the recommendations proposed here also serve as solutions to what Epic Games had suggested years ago. In 2020, the Fortnite developer sued Apple and Google for violating antitrust laws. While Epic lost its suit against Apple, it meant Apple could no longer prohibit links to third-party payment options on the App Store.