A new House bill aims to curb anti-competitive practices by major app store operators, such as Apple and Google. Introduced by Rep. Kat Cammack (R-FL), the App Store Freedom Act aims to compel app stores with over 100 million users to allow them to set a third-party store as their default.
“We must continue to hold Big Tech accountable and promote competition that allows all players to enter the field,” said Rep. Cammack. “For too long, consumers and developers have borne the brunt of anti-competitive practices on major app store marketplaces.”
Additionally, it would allow device users to uninstall pre-installed apps that ship with the operating system. Most of these unnecessary apps, also referred to as bloatware, consume space, battery and processing power, and pose security and privacy risks to users who do not need them in the first place.
If passed, the bill would grant users the power to uninstall unwanted preinstalled apps. Users can also sideload apps from third-party marketplaces, which Apple currently prohibits. Allowing users to select third-party app stores as their default will result in new marketplaces that specifically cater to various demographics, such as parents concerned about their children’s safety.
Similarly, it would allow developers to access various interfaces, features, and development tools without cost or discrimination. Currently, some major app stores prohibit developers from using third-party functionalities, such as billing and payment processing.
Subsequently, the developers are forced to process payments via the default store’s in-app billing feature, for which they pay exorbitant commissions. Apple charges up to 30% commissions for purchases made via the App Store. This extra charge increases the product’s cost, making it less competitive than others listed on third-party marketplaces.
“Dominant app stores have controlled customer data and forced consumers to use the marketplaces’ own merchant services, instead of the native, in-app offerings provided by the applications and developers themselves,” Rep. Cammack added. “The results are higher prices and limited selections for consumers and anti-competitive practices for developers that have stifled innovation.”
Some tech companies, such as Netflix and Spotify, have tried to circumvent these restrictions by removing in-app purchase features and limiting account management to online web apps.
However, applications that attempt to bypass the default store’s in-app billing system are usually threatened with delisting and other restrictions that negatively affect the developer. Others are slapped with warning labels and exclamation marks, undermining user trust, despite not posing any security threats.
Under the proposed legislation, punishing apps installed from third-party marketplaces, offer better deals outside the default app store, or circumvent the operators’ in-app payment features will be illegal.
Describing the bill as a “game-changer for American consumers,” Spotify and praised Rep. Cammack for introducing the common-sense bill that would “permanently open up the app economy, unlock new opportunities for businesses and creators, and encourage even stronger tech innovation in the United States.”
The Coalition for App Fairness (CAF) also said the bill would “establish a fair and competitive mobile app marketplace” and empower developers and consumers “by ensuring a level playing field for all participants in the app ecosystem.”
The European Union’s Digital Markets Act (DMA) already prohibits app stores from blocking users from better deals on third-party marketplaces.
“Under the DMA, app developers distributing their apps via Apple’s App Store should be able to inform customers, free of charge, of alternative offers outside the App Store, steer them to those offers and allow them to make purchases.”
In April, the European Union found that Apple violated those terms and slapped the tech giant with a $585 million (€ 500 million) fine. The EU also ordered Apple to remove restrictions barring developers from redirecting users to better deals outside the tech giant’s walled garden.
“As part of today’s decision, the Commission has ordered Apple to remove the technical and commercial restrictions on steering and to refrain from perpetuating the non-compliant conduct in the future, which includes adopting conduct with an equivalent object or effect.”
In August 2021, lawmakers had introduced the bipartisan Open App Markets Act (OAMA). However, both the Senate and House companion bills were buried in their respective Jurisdiction Committees.
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