Google and Apple are painting an apocalyptic picture of the pearl-clutching concept of the Open App Markets Act. They are quick to say that their fenced app stores are important to our security and privacy. But the truth is, it’s greedy, monopolistic rent-seekers who fear being forced to open up their platforms, and most importantly, billions of dollars in pure profit.
Most people don’t know that Apple and Google collect 30% from every App Store purchase, microtransaction and subscription. And while both have moved to reduce that to a “generous” 15% in some cases, this level of self-control still leaves much to be desired.
While still in the introductory stage, Open Application Markets Act If passed, it would break the app market duopoly dominated by Apple and Google. The act is one in a larger round of reforms to the American Innovation and Choice Online Act that targets big tech companies. For antitrust and consumer choice violations.
It gives many wins to app developers, Also anyone interested in curbing anti-competitive behavior in a free market (hint: it should be most of us). The biggest change is that Apple (or similar companies) can no longer make developers use in-app purchases as a condition of app distribution. App stores can also no longer claim price matching for hosted apps.
It also prohibits punitive action against developers for using different pricing terms. And that means app store developers can’t stop talking directly to their users about alternative pricing or payment methods. Phones will no longer be in the manufacturer’s app store by default, and developers will have more protection from competitors using non-public information to create copycat apps. Ultimately, the move would force Apple to allow sideloading and alternative app stores like we see for gaming platforms like Steam and Epic. You can see why Apple is lobbying so hard against it.
The action will have a major impact on big tech companies and technology regulation, and could change the current outcome of some cases. At the moment, Epic Games is interesting. Epic v. Apple From the 2021 decision. The lawsuit stems from Epic Games waiving the 30% processing fee Apple charges all developers for in-app purchases. Epic has made Fortnite users purchase the in-game currency directly from Epic Games instead of Apple’s App Store payment system. Apple asked Epic to update the app and eventually removed Fortnite from the store when Epic refused. The judge ruled in favor of Apple that Epic had not suffered irreparable harm as a result of its removal from the App Store.
Paying tribute to other people’s hard work and creativity in app development feels inherently unfair and, frankly, frustrating. That This action is opposed, and That’s what he said. That’s why Epic sued Apple and is appealing the verdict. Another aim of the act is to control big technology. And look forward to the future of technology. Companies like Apple, Google and Amazon, which have so far monopolized the industry, are now the Wild West.
The new law will level the playing field: App developers and consumers will have alternative ways to distribute and download apps. The dreaded “Apple tax” is no longer binding, as app stores can no longer force people to make in-app purchases for subscriptions. This in itself changes the market economics of the App Store and gives incentives to startups, no longer handcuffed by a 30% fee.
Apple’s and Google’s fear mongering around this action is exactly what it should be called. We already have a perfect example in our computers: Windows and OS X allow us to install and run the software we want. Apple and Google argue that their mobile operating systems are intrinsically and emotionally intangible ecosystems, but that simply isn’t true.
Despite the passage of the Open Markets Act, I haven’t seen a general shift in consumers from the major app stores on their devices. First-party integrations still offer some nice features, including convenience around deletion and some privacy enforcement. Passage, though, will usher in a sea change in mobile gaming. Apple and Android both make a lot of money from mobile gaming, and they won’t be happy if their phones like Steam and Epic are forced into it. Perhaps more importantly, the shift to in-app purchases will encourage a new generation of startups.
At this point, the power is in the hands of the Congress. The bill’s language and details are swinging for the fences, removing in-app purchase requirements and allowing outside app stores to exit. Enforcement of the law allows plaintiffs (app developers) to go after app stores. Basically, as an app developer, you can follow in the footsteps of Epic Games and find out how in-app purchases and other existing app store rules and restrictions have hindered your success and find disadvantages for it. App developers’ ability to sue is a game changer.
To me, this act mainly boils down to the fact that taxing someone else’s creativity and innovation is wrong, and I feel that limiting what we can put on our devices is anti-competitive. Big Tech companies are getting a little comfortable with the huge profits they’ve been reaping. In this act, they are forced to fight with dogs.
Chris Cardinal is the founding principal of Synapse Studio.
