Feds Slam Apple, Google for Abusing App-Store Power (But Mostly Apple)

A recent report(Opens in a new window) from the Commerce Department isn’t anything new for long-time Apple and Google watchers, but having the feds outline a history of craven control-freakery is not exactly good PR for the companies. 

The 48-page “Competition in the Mobile Application Ecosystem” report (PDF(Opens in a new window)) from the National Telecommunications and Information Administration (NTIA) recaps a familiar list of problems with both iOS and Android, with Apple getting enough added criticism that the word “Apple” might as well appear in a larger point size:

• It’s near-impossible to distribute an app outside of Apple’s App Store (iOS bans third-party app stores and direct downloads of apps from websites) and difficult outside Google’s Play Store (Android lets you do those things, but only after disabling multiple security defaults).

• Apple and Google collect outsize rents by forcing developers to use their payment mechanisms for in-app digital transactions, taking as much as 30% of every payment, and prohibiting developers from even pointing their customers to web payment options. (Apple loosened that rule last year for “reader” apps that display paid-for digital content.)

• App-store review processes are often opaque to developers and can leave worthwhile apps held up for garbage reasons, even as scam apps slide by(Opens in a new window). 

• Apple and Google preinstalling their own apps and setting them as defaults can further discourage competition.

• Apple has further suppressed competition by blocking third-party browsers from using some common web features and by requiring them to run on its WebKit framework. (Unsaid in the report: This leaves such competitors as Firefox for iOS exposed to WebKit bugs until Apple patches them.) 

“All of these factors translate 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 report says.

The report also misses some finer points. For example, it barely alludes to the way Android’s open-source code has let Amazon build a large business in Kindle Fire tablets running a version of that code without the Play Store.

And it’s less clear on what to do about these problems, assuming Apple and Google won’t act less greedy anytime soon. The report endorses legislation or regulation to require platform owners to let users use third-party app stores and set third-party apps and app stores as their defaults, ban “self-preferencing” platform-owner conduct, end requirements that lock in-app digital transactions to in-house payment systems, open up browser competition, and mandate app-review transparency.

The NTIA document also has an action item for Congress: Pass meaningful privacy legislation instead of leaving Apple and Google to regulate privacy in mobile apps as they see fit (even if their rules exclude their own apps). 

But while some complaints from Apple and Google about violating the sanctity of their app-store security can look hypocritical, there are real security risks in downloading apps from outside those official channels. The digital-rights group TechFreedom also warned(Opens in a new window) that regulation of app-store review “will inevitably be weaponized” by bad-faith actors looking to avoid Apple or Google enforcing even minimum content-moderation rules.

Legislation to impose rules like those suggested in the report didn’t go anywhere in the last session of Congress, but the US won’t have to wait long to see a real-world test of them. The European Union’s Digital Markets Act will enforce even broader regulations on Apple, Google, and other “gatekeeper” platforms, and Apple will apparently comply. 

The NTIA undertook the study as directed by President Biden’s July 9, 2021 executive order on competition(Opens in a new window). This sweeping document has also led to such actions as the Federal Trade Commission moving to ban non-compete clauses, and which speaks to an executive branch increasingly uninterested in the usual trust-us assurances from large tech companies.