Dominance of Apple & Google App Stores Hurting Consumers, Says ACCC

Apple Google App Stores Hurting Consumers

The Australian competition watchdog has warned that the dominance of Apple and Google App Stores is hurting consumers due to a lack of competition. 

The warning comes from the Australian Competition and Consumer Commission, who says that the developers of applications on the Apple and Google App Stores deserve reasonable terms that don’t exist in the absence of competition. 

The ACCC has published its Digital Platform Services Inquiry interim report, and found that the dominance of Apple and Google App Stores is hurting consumers and “measures are needed to address this.” 

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The ACCC’s Chair, Rod Sims has issued a statement saying that “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.” 

However, as Sims explained, “there are significant issues with how this market is operating.” 

Chief among the competition watchdog’s concerns is the fact that products from Apple and Google on the App Store compete against those of third parties, which can lead to incentivising their own products, hindering competition. 

“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.” 

The ACCC is calling on Apple and Google to publish a transparent set of rules for their App Stores, and called for the tech giants to be barred from using information collected to give them a competitive edge. 

“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’s Chair, Rod Sims said. 

Dominance of Apple & Google App Stores Hurting Consumers, Says ACCC

The ACCC has come up with a number of recommendations in its latest report to ensure competition within Apple & Google app stores, including: 

  • Consumers be able to rate and review all apps
  • Consumers have the ability to change any pre-installed default app on their device
  • App developers be allowed to provide consumers with information about alternative payment options 
  • Information collected by Apple and Google in their capacity as app marketplace operators be ring-fenced from their other operations. 

“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.” 

There have also been calls for the establishment of an independent panel to review disputes within the app stores of Google and Apple, to eliminate any potential bias in the conflict resolution system. 

“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.” 

Mr Sims said in relation to the recommendations the ACCC has put forward that “we have identified a number of areas where action is required… there is 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.” 

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