Apple and Google may be forced to have third-party app stores by the National Telecommunications and Information Administration. The NTIA says that the current business model of both companies “is harmful to consumers and developers.”
Apple and Google may be forced to have third-party app stores by the NTIA
From February 13 onwards, Apple’s App Store prices in several countries outside of the United States will see an increase. Ahead of the price increase, the NTIA has released a report calling “on Apple and Google to do better.”
The NTIA conducted an investigation on the business models of Apple and Google. It claims that the current “mobile app store model has provided a range of benefits to both app developers and users, but has also created conditions of competition that are suboptimal.”
The report goes on to say that the policies Apple and Google have in place have “created unnecessary barriers and costs for app developers,” ranging from “fees for access to functional restrictions that favor some apps over others.” The NTIA claims that “in some areas, such as in-app payments, it is unclear how the current system benefits anyone other than Apple and Google.”
The NTIA says that these “setbacks mean that app developers and alternative mobile app stores are not
afforded the opportunity to compete on a fair playing field— whether with each other or with the
products and services offered by the gatekeepers.” It goes on to say that these factors lead to potential losses
for consumers, “prices that are inflated due to the fees collected by gatekeepers, innovation that is
hampered by policy decisions to limit access to smartphone capabilities, and the loss of choice of
apps that are not featured or even accessible for smartphone users.”
The Executive Branch says that considering the “growing importance of this ecosystem to our economy,” Congress should pursue measures that will effectively force Apple and Google “to open the ecosystem to greater competition.” Opening the ecosystem will lead to fair competition on a level playing field, more choices for consumers, better quality, and lower prices, the report suggests.
Apple has vehemently protested the idea of third-party app stores due to security concerns. On the other, Google allows sideloading of apps from third parties. The NTIA acknowledges Apple’s position but points out that others disagree.
“While Apple and Google provide reasons why some measures might be in place, such as the benefits to users in increased security and privacy protections, and to developers in terms of access to markets and development tools,” it says, “many commenters challenge the technical necessities of these choices and question whether other models could provide similar if not greater benefit.”
Apple provided a thorough justification for its App Store policies in a document it filed as part of the investigation. Those arguments centered on Apple’s privacy policies and how it has aided approximately 20 million app developers in reaching users.
