Regulation ‘may be required’ for app stores: ACCC

Joseph Brookes
Senior Reporter

The competition watchdog has fired a warning shot at Google and Apple, telling the tech giants to clean up their app stores now or face regulation which will make them do so.

The Australian Competition and Consumer Commission (ACCC) has spent the last seven months investigating the notoriously murky app stores of Google and Apple, finding there are “significant issues which warrant attention”.

According to the ACCC, Google and Apple need to be more transparent about how they promote apps, offer consumers the ability to change and remove preinstalled or default apps, ensure they do not use information collected about third party apps to advantage their own, and reconsider payment systems that exclude competitors.

Apple and Google could also “do more” to prevent and remove malicious apps from their stores, according to the regulator, which said the two US giants now have a clear “window of opportunity” to address the issues.

Google platforms
Australia’s competition regulator has warned Apple and Google to clean up their app stores. Image: achinthamb / Shutterstock

The ACCC has ongoing concerns that digital platform companies have the ability and incentive to favour their own products and related businesses, often under the cover of opaque algorithms and platforms.

In its latest interim report on digital platform services, the ACCC examined the problems as they relate to app stores, which are dominated in Australia by Apple and Google and their respective App Store and Play Store.

The pair’s dominance, including their ability to set the rules for who can access the app store, has the potential to harm competition and app developers and consumers, according to the ACCC.

The latest report found Google and Apple need to do more to prevent harm and allow competition.

“This is an area where the ACCC considers more can be done by Apple and Google, including in order to meet expectations that they should not leverage their market power, and the access they have to commercial information, to advantage themselves to the disadvantage of rival apps,” the report found.

“This report identifies, as potential measures, those steps that could be undertaken by Apple and Google; however, regulation may be required if they fail to do so.”

ACCC chairman Rod Sims, who led the regulator’s landmark 2019 inquiry into digital platform, said there are still serious concerns with the market power of the tech giants.

“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,” Mr Sims said.

“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 has suggested a series of measures for the platform giants in response to its findings, including more rating and reviewing of apps, the ability to change preinstalled apps, app developers being allowed to inform consumers about alternative payment methods and that the data collected by Apple and Google as app store operators be “ring-fenced” from their other operations.

“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,” Mr Sims said.

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