Apple and Google seem to be worried about legislation that would force iOS and Android to be more open to third-party app stores and sideloaded apps.
US Senators Richard Blumenthal (D-Conn.), Marsha Blackburn (R-Tenn.), and Amy Klobuchar (D-Minn.) introduced their Open App Markets Act yesterday. Shortly after the senators announced the bill, a group funded by Apple and Google sent a statement to media claiming that the proposed law “is a finger in the eye of anyone who bought an iPhone or Android because the phones and their app stores are safe, reliable, and easy to use.”
The statement came from the “Chamber of Progress,” which calls itself “a new center-left tech industry policy coalition promoting technology’s progressive future.”
“I don’t see any consumers marching in Washington demanding that Congress make their smartphones dumber. And Congress has better things to do than intervene in a multi-million dollar dispute between businesses,” said Chamber of Progress CEO Adam Kovacevich, who was formerly a longtime Google lobbyist.
Kovacevich played key role at Google
The Chamber of Progress’ website lists 20 “corporate partners,” with Apple and Google being the most relevant ones in this case. Amazon, Facebook, and Twitter are also funders. The group says its “partners do not sit on our board of directors and do not have a vote on or veto over our positions” and that “we do not speak for individual partner companies and remain true to our stated principles even when our partners disagree.”
But the group’s lobbying against the new app-store legislation neatly matches the positions of Apple and Google, which have been fighting attempts to make their mobile operating systems more open. Apple issued a statement yesterday that conveyed the same basic message in a less combative way. “At Apple, our focus is on maintaining an App Store where people can have confidence that every app must meet our rigorous guidelines and their privacy and security is protected,” the company said, according to CNBC. Google declined to comment when contacted by Ars today but has pointed out that Android is more open to app stores and sideloaded apps than iOS.
The Chamber of Progress became active a few months ago and also lobbied against antitrust legislation that could prohibit platform operators like Amazon, Apple, Google, and Facebook from favoring their own products and services and even break up Big Tech companies.
Kovacevich’s bio on the Chamber of Progress website says he “previously led Google’s 15-person US policy strategy and external affairs team” and approvingly quotes a June 2019 Wall Street Journal article that said Kovacevich “helped build [Google’s] influence operation into one of the largest in the nation’s capital” and was “a central player in Google’s efforts to shape perceptions and rules in ways that have been favorable to the business of the search and advertising giant.” The bio also says Kovacevich “ran Google’s work to close its 2011–2013 FTC antitrust investigation.”
“Tear down coercive anticompetitive walls”
The lawmakers’ announcement of their bill said that “Google and Apple have gatekeeper control of the two dominant mobile operating systems and their app stores that allow them to exclusively dictate the terms of the app market, inhibiting competition and restricting consumer choice.” The lawmakers summarize the legislation as follows:
The Open App Markets Act would protect developers’ rights to tell consumers about lower prices and offer competitive pricing; protect sideloading of apps; open up competitive avenues for startup apps, third party app stores, and payment services; make it possible for developers to offer new experiences that take advantage of consumer device features; give consumers more control over their devices; prevent app stores from disadvantaging developers; and set safeguards to continue to protect privacy, security, and safety of consumers.
Blackburn said that “Apple and Google want to prevent developers and consumers from using third-party app stores that would threaten their bottom line,” while Blumenthal said the two companies “have squashed competitors and kept consumers in the dark—pocketing hefty windfalls while acting as supposedly benevolent gatekeepers of this multi-billion dollar market.”
“This legislation will tear down coercive anticompetitive walls in the app economy, giving consumers more choices and smaller startup tech companies a fighting chance,” Blumenthal said.
What the bill does
The bill covers companies that own or control an app store with at least 50 million US users, obviously targeting Apple and Google. The companies would have to “allow and provide the readily accessible means for users” to “choose third-party Apps or App Stores as defaults for categories appropriate to the App or App Store” and “install third-party Apps or App Stores through means other than its App Store.” Apple and Google would also have to let users “hide or delete Apps or App Stores provided or preinstalled by the App Store owner or any of its business partners.”
Android does allow sideloading and third-party app stores, while Apple locks iOS down more strictly, but both companies could have to change business practices to different degrees if the legislation becomes law. Despite Android’s openness relative to iOS, 36 states sued Google last month, claiming it worked to “preemptively quash” competing app stores.
The Open App Markets Act would prohibit the app-store operators from requiring developers to use the Apple and Google in-app payment systems and from imposing terms that block or penalize developers who offer the same app at a different price elsewhere. Apple and Google also would not be allowed to preference their own apps in search “unreasonably,” which is defined as “applying ranking schemes or algorithms that prioritize apps” simply because they are owned by Apple and Google or their business partners. Clearly disclosed advertising is exempt from that provision.
To help third-party software developers, the bill says Apple and Google must provide “access to operating system interfaces, development information, and hardware and software features” to developers “on a timely basis and on terms that are equivalent or functionally equivalent” to the terms that apply to Apple and Google or their business partners.
Violations of the bill would be considered unfair methods of competition under US law. The Federal Trade Commission, US attorney general, and state attorneys general would be able to sue companies over violations. Developers who are “injured by reason of anything forbidden in this act” would be able to sue the companies for damages and injunctive relief.
Apple and Google would likely object to the bill on security grounds. Apple in particular has touted the security benefits of the iOS app model that generally prevents the installation of software from outside the App Store. To address this issue, the Open App Markets Act allows the companies to impose restrictions designed solely for security purposes, although this is nebulously defined.
The bill says that actions by app-store operators would not violate the proposed law if they are “necessary to achieve user privacy, security, or digital safety; taken to prevent spam or fraud; or taken to prevent a violation of, or comply with, federal or state law.” To obtain this exemption, Apple and Google would have to establish “by clear and convincing evidence that the action described is applied on a demonstrably consistent basis to apps of the covered company or its business partners and to other apps; not used as a pretext to exclude, or impose unnecessary or discriminatory terms on, third-party apps, in-app payment systems, or app stores; and narrowly tailored and could not be achieved through a less discriminatory and technically possible means.”
App battle on the way
The quick response from the Apple- and Google-funded group to yesterday’s announcement foreshadows another battle on Capitol Hill if the bill moves forward. Apple in June “launched a substantial public-relations push” against “calls from regulators to open the gates to alternative app stores and sideloaded apps on the iPhone,” as we wrote at the time. CEO Tim Cook said that sideloading is “not in the best interests of the user,” while another Apple executive claimed that “sideloading in this case is actually eliminating choice” and described sideloading as the app-installation equivalent of “some dark alley or side road.”
When the 36 states filed their antitrust lawsuit against Google last month, Google called the complaint meritless and said it is “strange that a group of state attorneys general chose to file a lawsuit attacking a system that provides more openness and choice than others.” Meanwhile, a “Coalition for App Fairness,” with members such as Spotify, Epic Games, Match Group, Basecamp, ProtonMail, and Deezer, is on board with the Open App Markets Act.
“The Open App Markets Act would fix a broken app marketplace by barring app stores from requiring apps to use their in-app payment systems, through which they charge exorbitant fees and block communications between developers and their own customers,” the group said. “It would also strengthen consumer freedom by allowing people to choose and install the app store and default apps that make the most sense for them and easily delete preinstalled apps they don’t want to use.”