The Australian Competition and Consumer Commission is considering regulating Apple and Google to increase competition in app stores

The Australian Competition and Consumer Commission is considering regulating Apple and Google to increase competition in app stores

In April, the ACCC released an interim report as part of its long-running digital platforms inquiry, arguing that while Apple and Google competed with each other, both companies faced very little competition in app distributions on their respective mobile platforms. The competition watchdog suggested the companies were stifling competition with their control over what apps could do on their platforms.

Push comes as Fortnite maker Epic Games battles the internet titans in a global legal battle over in-app purchases. The Australian Competition and Consumer Commission believes “upfront rules and regulations” may be required to force the tech giants to open their app stores to wider competition as Fortnite developer Epic Games continues its worldwide legal battle against Apple and Google over in-app payments. Developers for Apple’s iOS platforms must utilise the App Store, but Google allows apps to be installed on Android devices outside of the Play Store via direct download or other marketplaces, however adoption of these methods is restricted.

The interim report argued users should be able to choose alternative payment options outside those provided by Apple and Google. They at present take a 15-30% cut from every purchase. The report also suggested users should be able to decide between default apps and third-party apps that performed the same function and that Apple and Google should ringfence data they collected in the app markets from the rest of their businesses so it was not misused. In a speech to the Global Competition Review webinar on Thursday, the ACCC chair, Rod Sims, will say the commission is yet to make final recommendations, but he flags more rules depending on what other countries do, and whether Apple and Google take steps he believes are reasonable.

“It is likely, however, that upfront rules and regulation may be needed to achieve these objectives,” Sims said in an advance copy of his speech. “We are closely following overseas moves that aim to address the same competition and consumer concerns that we have identified.” The in-app payment fee has been the focus of lawsuits brought against both companies by Epic Games after Fortnite was kicked off both app stores for bypassing the in-app purchase systems Apple and Google force developers to use.

Epic Games won a full federal court appeal last month to allow the case to be heard in Australia while similar litigation is being considered by a US court. The judgment in the US case has yet to be handed down and Apple has said it will appeal against the Australian decision to the high court. Sims noted that the European Commission was examining Apple Pay and Apple’s mobile ecosystem and there was litigation by US attorneys general against Google over its app store. Sims suggested such international legal action, along with the Epic Games lawsuit, could help make app stores more competitive before the ACCC headed down the path of regulation.

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