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ACCC puts Google and Apple on notice over App Store competition and consumer rights

The ACCC isn’t sitting back sipping a cold beer after their massive start to 2021 with the war against Facebook and Google, now Google again and this time Apple are in their sights over the App Store and Google Play Stores.

Rod Sims and his team of merry men and women who fight for the rights of Australian consumers have been in the midst of a five year investigation of Digital Platforms, with the second part of that focusing on App Marketplaces released today.

The long and the short of it is that the ACCC think Google and Apple need to make changes to the way their App stores operate, or face the Wrath of Rod Sims.

While there’s no action being taken, the ACCC describe this as a “window of opportunity for Apple and Google themselves to take steps to improve outcomes for app developers and consumers by adopting the potential measures we have identified,

As part of the report, the ACCC has put forward some measures that could assist in the formulation of any response or action from Apple and Google . These include:

  • Allowing users to rate and review first party apps (Never noticed this, but yeah, you can’t give Apple’s Calendar App a rating or review, but every other one you can)
  • Give users the choice to change any pre-installed default app on their device
  • App Developers should be allowed to communicate information about alternate payment options
  • And that Apple and Google ring-fence any information they collect about their App Marketplace from the rest of their company operations.

It’s all going to be a fight of the lawyers, as clear by the many submissions made to the ACCC from everyone including Apple, Google, Epic Games even the Australian Commercial Radio body CRA.

ACCC Chair Rod Sims says “Apps are everywhere, they are an essential part of our daily lives. Whether we keep up with the news, stay in touch with friends, catch up on the latest series on a streaming platform, order a ride or a meal, or shop online, it is likely we will use an app for that. And if consumers use an Apple mobile, they can only download apps from the Apple App Store. For other consumers using a mobile running the Android OS, the main place they download apps from is the Google Play Store,”

 “Apple and Google’s stores are the gateways between consumers and app developers, and it’s true that they provide considerable benefits to both groups. But there are significant issues with how this market is operating.”

“Apple and Google don’t only run the app marketplaces, they also compete within them with their own apps. They have the ability and incentive to promote their own apps over others, and they control the terms that their competitors must comply with to gain access to their stores,” Mr Sims said.

It’s that competition within their own marketplace that appears to rub the ACCC the wrong way the most, while many of the submissions sight the non negotiable terms and conditions of the App Stores.

“To address this market power, we believe app developers should have more information about how their apps are made discoverable to consumers and that consumers should have the ability to change or remove any pre-installed or default apps. Apple and Google should also be prevented from using information collected about third-party apps to advantage their own competing apps.”

“The ACCC is also concerned with restrictions imposed by Apple and Google which mean developers have no choice but to use Apple and Google’s own payment systems for any in-app purchases,” Mr Sims said.

As part of their findings, the ACCC is also recommending Apple and Google to more to ensure scams and subscription traps are cracked down on, Mr Sims saying “Further while Apple and Google have made efforts to remove malicious apps from the app stores, we believe they could do more to prevent and remove apps that feature, for example, subscription traps and other scams.”

“There is a clear need for better redress and dispute resolution for consumers who are harmed by these sorts of apps, or who have disputes over payments and other issues. This situation reinforces the need for an external dispute resolution body for digital platforms including Apple and Google, as previously recommended by the ACCC.”

In response to the ACCC report, An Apple Spokesperson told EFTM “Since its launch in 2008, the App Store has transformed how Australians are informed, inspired and entertained, and simultaneously created a rich source of opportunity for developers, turning great ideas into successful businesses that are thriving on a global stage. Today the App Store is home to nearly 2 million apps, all of which meet Apple’s rigorous standards of privacy, security and content, offering our customers a safe and trusted place to download apps. This unwavering commitment to bringing our customers the best experience is applied equally and evenly to all, including Apple’s own apps. We welcome the opportunity to continue this discussion with the ACCC.”

This isn’t a short term win, or loss for anyone, but a very clear line in the sand from the ACCC which will continue to review the situation over the coming 3-4 years.

ACCC puts Google and Apple on notice over App Store competition and consumer rights
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