The US Commerce Department is putting an official stamp on what many have saying for years: the iOS and Android app store model “is harmful to consumers and developers.”
That’s the conclusion of the National Telecommunications and Information Administration (NTIA) report into competition in the mobile app ecosystem, which it claims is more than a bit stifled by Apple and Google.
The Silicon Valley pair’s ultimate say in what apps make it to the markets for their OSes, and the hefty profits they earn by keeping those gates, are standing in the way of smartphones being better than they could be, the agency said in its report.
“Apps are a critical tool for consumers and an essential part of doing business online,” said NTIA Administrator Alan Davidson. “It is more important than ever that the market for mobile apps remains competitive,” Davidson said.
The report was issued as part of President Biden’s 2021 executive order on Promoting Competition in the American Economy, which included several initiatives aimed at improving fairness and fostering competition in the tech industry.
Among the findings of the report, the NTIA said Apple and Google stifled competition by forcing apps to be distributed through their stores despite secure, safe alternatives being possible, gave preference to their own apps over third-party alternatives and forced developers to deal with a “slow and opaque” review process.
Those and other arbitrary rules and restrictions, the NTIA said, lead to worse products and could even kill small businesses. “These obstacles impose costs on firms and organizations offering new technology: apps lack features, development and roll-out costs are higher, customer relations are damaged, and many apps fail to reach a large number of users,” the agency said in the report.
How to build a better app ecosystem
While the study concludes that the mobile app store model has some benefits – like providing a range of apps to users and ensuring a basic level of security – it said the obstacles baked into their design outweigh the perks.
Many of the complaints are familiar to those following cases like Apple’s legal fight with Fortnight maker Epic Games, which accused Apple of forcing it to pay exorbitant fees for in-app purchases and barred it from allowing users to make the same purchases outside of Apple’s ecosystem for a lower price.
The recommended remedies will likely be familiar, too.
The NTIA said it wants regulations to allow users to set their own default app preferences, force third-party app stores to be allowed on both iOS, and even wants Apple and Google banned from using app store data to build their own in-house versions of popular apps.
The report also recommends additional investigation of third-party app stores and allowing sideloading, which it admits could be risky and should “entail consideration also of user convenience, privacy, and security.”
The NTIA also said it would like to see new interoperability rules to make developing apps for both Android and iOS easier and said US antitrust agencies also need more funding to ensure the government could actually enforce any new antitrust laws if they are passed.
We asked Google and Apple what it thought of the report and its recommendations; Apple didn’t respond, but apart from disagreeing with Android’s characterization as a closed, anticompetitive system, Google’s response indicated it agreed with what the NTIA had to say.
“NTIA recognizes the importance of interoperability, multiple app stores and sideloading, which Android’s open system already supports – all while ensuring privacy and security,” the Chocolate Factory told us. Some of that is debatable, but being amenable to some change is a start.
Apple has reportedly already accepted that the EU will require it to allow third party app stores, but whether that change ends up applying to its US customers probably depends on whether the NTIA’s report gets any legislative traction.
“NTIA’s recommendations, if enacted, would put fairer rules in place in the mobile app ecosystem, to the benefit of consumers and competition,” the Biden Administration said. ®