Latest News by Industry
By Arghyadeep Dutta, 4:15 pm ET:
A new bipartisan bill was introduced on Wednesday to bring more competition to the smartphone app store market currently dominated by Apple Inc and Alphabet Inc’s Google and said the duo has too much market control.
Democratic Senators Richard Blumenthal and Amy Klobuchar and Republican Senator Marsha Blackburn sponsored the Open App Markets Act, which would disrupt both companies’ app store businesses.
The bill targets to bar the smartphone app stores from forcing the developers to use store-specific proprietary payment systems and prohibit the companies from punishing apps that offer different prices or conditions through another app store.
“I found this predatory abuse of Apple and Google so deeply offensive on so many levels,” Blumenthal said in an interview Wednesday. “Their power has reached a point where they are impacting the whole economy in stifling and strangling innovation.”
Blumenthal said he expected companion legislation in the House of Representatives “very soon.”
The bill would aim to force the companies to allow for third-party app stores, which are available to Google’s Android users, but Apple only allows app downloads through its store.
Earlier Google said that Android devices often come preloaded with two or more app stores that allow users to download apps without using Google’s Play Store.
It would also ask the companies to allow sideloading apps, meaning the apps don’t need to be downloaded from an official app store. Apple, in particular, has expressed concern that sideloading could open consumers’ phones to security vulnerabilities.
The new bill can potentially put Apple to a higher stake, whose App Store generates $53.8 billion services business.
However, the legislation does leave room for Apple and Google to make the case that the in-app payment system and other tools are compulsory for security purposes.
The bill says platforms would not be in violation, if the companies can state that any action is essential for user privacy or security or fraud prevention.
The legislation follows an antitrust lawsuit against Apple, filed by “Fortnite” creator Epic Games, stating that the iPhone maker collects commissions on digital sales, which currently range from 15% to 30%.
Epic also sued Google for its app store practices and has put the tech giant under regulatory scrutiny.