“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.
What the Bill Does
The bill covers companies that own or control an app store with at least 50 million US users, obviously targeting Apple and Google. The companies would have to “allow and provide the readily accessible means for users” to “choose third-party Apps or App Stores as defaults for categories appropriate to the App or App Store” and “install third-party Apps or App Stores through means other than its App Store.” Apple and Google would also have to let users “hide or delete Apps or App Stores provided or preinstalled by the App Store owner or any of its business partners.”
Android does allow sideloading and third-party app stores, while Apple locks iOS down more strictly, but both companies could have to change business practices to different degrees if the legislation becomes law. Despite Android’s openness relative to iOS, 36 states sued Google last month, claiming it worked to “preemptively quash” competing app stores.
The Open App Markets Act would prohibit the app-store operators from requiring developers to use the Apple and Google in-app payment systems and from imposing terms that block or penalize developers who offer the same app at a different price elsewhere. Apple and Google also would not be allowed to preference their own apps in search “unreasonably,” which is defined as “applying ranking schemes or algorithms that prioritize apps” simply because they are owned by Apple and Google or their business partners. Clearly disclosed advertising is exempt from that provision.
To help third-party software developers, the bill says Apple and Google must provide “access to operating system interfaces, development information, and hardware and software features” to developers “on a timely basis and on terms that are equivalent or functionally equivalent” to the terms that apply to Apple and Google or their business partners.
Violations of the bill would be considered unfair methods of competition under US law. The Federal Trade Commission, US attorney general, and state attorneys general would be able to sue companies over violations. Developers who are “injured by reason of anything forbidden in this act” would be able to sue the companies for damages and injunctive relief.
Addressing Security
Apple and Google would likely object to the bill on security grounds. Apple in particular has touted the security benefits of the iOS app model that generally prevents the installation of software from outside the App Store. To address this issue, the Open App Markets Act allows the companies to impose restrictions designed solely for security purposes, although this is nebulously defined.
The bill says that actions by app-store operators would not violate the proposed law if they are “necessary to achieve user privacy, security, or digital safety; taken to prevent spam or fraud; or taken to prevent a violation of, or comply with, federal or state law.” To obtain this exemption, Apple and Google would have to establish “by clear and convincing evidence that the action described is applied on a demonstrably consistent basis to apps of the covered company or its business partners and to other apps; not used as a pretext to exclude, or impose unnecessary or discriminatory terms on, third-party apps, in-app payment systems, or app stores; and narrowly tailored and could not be achieved through a less discriminatory and technically possible means.”
App Battle on the Way
The quick response from the Apple- and Google-funded group to Wednesday’s announcement foreshadows another battle on Capitol Hill if the bill moves forward. Apple in June “launched a substantial public-relations push” against “calls from regulators to open the gates to alternative app stores and sideloaded apps on the iPhone,” as we wrote at the time. CEO Tim Cook said that sideloading is “not in the best interests of the user,” while another Apple executive claimed that “sideloading in this case is actually eliminating choice” and described sideloading as the app-installation equivalent of “some dark alley or side road.”
When the 36 states filed their antitrust lawsuit against Google last month, Google called the complaint meritless and said it is “strange that a group of state attorneys general chose to file a lawsuit attacking a system that provides more openness and choice than others.” Meanwhile, a “Coalition for App Fairness,” with members such as Spotify, Epic Games, Match Group, Basecamp, ProtonMail, and Deezer, is on board with the Open App Markets Act.
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