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Senate Bill Would Ban Apple, Google App Stores From Forcing Developers to Use Their In-App Payment Systems

Todd Spangler
·5-min read

Legislation introduced in the U.S. Senate Wednesday would impose new restrictions and requirements on Apple’s App Store and Google Play — designed to end the two tech giants’ virtual monopoly control over the app ecosystem.

Companies like Spotify and Epic Games have been rallying against the big app stores for years, calling for change to challenge their power in app distribution.

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The new Senate bill, the Open App Markets Act, among other things would prohibit Apple and Google from requiring developers use their in-app payment systems, which take a standard 30% commission — and would let consumers select different third-party app stores for their mobile devices. The legislation was introduced by Sens. Richard Blumenthal (D-Conn.), Marsha Blackburn (R-Tenn.), and Amy Klobuchar (D-Minn.) on Wednesday.

According to the lawmakers, the Open App Markets Act would: protect developers’ rights to tell consumers about lower prices and offer competitive pricing; require devices to allow “sideloading” of apps (something Google’s Android allows, but Apple’s iPhone does not); open up competitive avenues for startup apps, third-party app stores and payment services; 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.

See Also: Inside the War on Apple and Google App Stores

“This legislation will tear down coercive anticompetitive walls in the app economy, giving consumers more choices and smaller startup tech companies a fighting chance,” Blumenthal said in a statement. “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 multibillion-dollar market.”

The full text of the bill is available at this link.

In a statement, Apple said: “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.”

Reps for Google did not respond to a request for comment.

In 2020, consumers worldwide spent $72.3 billion in the Apple App Store and Google Play pulled in $38.8 billion in gross revenue — both up about 30% year over year, according to estimates by research firm Sensor Tower.

Epic Games, maker of “Fortnite,” has sued both Apple and Google, alleging their app stores employ anticompetitive practices in violation of existing antitrust law. A ruling in the Epic Games v. Apple case is expected sometime this fall.

“The introduction of this bill is an important milestone in the continued fight for fairer digital platforms,” Corie Wright, Epic’s VP of public policy, said in a statement. “Its passage would enable developers to seek injunctions for violations of the Act, which will help level the playing field for small companies standing up to monopolists who are abusing their market power. This will make it easier for developers of all sizes to challenge these harmful practices and seek relief from retaliation, be it during litigation or simply because they dared speak up.”

Horacio Gutierrez, Spotify’s head of global affairs and chief legal officer, commented: “Spotify applauds the bipartisan leadership of Senators Klobuchar, Blumenthal, and Blackburn for introducing the Open App Markets Act and for their courage and resolve in holding Apple and other gatekeeper platforms accountable for their unfair and anticompetitive practices. These platforms control more commerce, information, and communication than ever before, and the power they exercise has huge economic and societal implications.”

In addition to requiring app stores to let developers use alternate payment mechanisms, the Open App Markets Act would let users choose which apps they want as their defaults (and delete pre-installed apps they don’t want) as well as install their choice of app store on their own devices.

The bill would bar app stores from “self-preferencing” (putting their own products at an advantage over those of competitors) and would prohibit Apple and Google from using confidential business information of third-party apps to create a competing product.

“Big Tech giants are forcing their own app stores on users at the expense of innovative startups,” Blackburn said in a statement. “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.”

See Also: Elon Musk Slams Apple’s App Store Fees as ‘De Facto Global Tax on the Internet’

Added Klobuchar, “Competition is critical to protecting small businesses and consumers, spurring innovation, and promoting economic equity. But as mobile technologies have become essential to our daily lives, it has become clear that a few gatekeepers control the app marketplace, wielding incredible power over which apps consumers can access. This raises serious competition concerns. 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.”

The Open App Markets Act has been endorsed by several 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 Coalition for App Fairness (CAF) was formed last September and currently has more than 60 members, including Spotify, Epic Games, Match Group, Deezer, News Media Europe, Tile and Basecamp.

“Since launching CAF, we have worked toward creating a fairer and more competitive app marketplace for both developers and consumers,” Meghan DiMuzio, the organization’s executive director, said. “The bipartisan Open App Markets Act is a step towards holding big tech companies accountable for practices that stifle competition for developers in the U.S. and around the world.”

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