The ACCC's Fierce Stance on Apple and Google's App Store Dominance: A Call for Change
The Australian Competition and Consumer Commission (ACCC) is intensifying its efforts to compel the Albanese government to enact long-awaited legislation that would mandate Apple and Google to open their devices to rival app stores and alternative payment systems. This move aims to foster a more competitive environment and provide developers and consumers with greater choice.
Gina Cass-Gottlieb, the ACCC chair, emphasizes the potential benefits of these reforms, drawing parallels to Europe, where similar regulations have already spurred the emergence of competing app stores. Under the current system, Apple and Google exert significant control over third-party app stores and often mandate the use of their proprietary payment systems, resulting in substantial commissions of up to 30%.
In contrast, Epic Games, which operates its own store internationally, adopts a more favorable commission structure, charging no fees on the first $1 million in revenue and a modest 12% thereafter. Cass-Gottlieb highlights the potential economic advantages of such reforms, considering the widespread use of apps across businesses and consumers.
The ACCC's advocacy has garnered support from the Australian Banking Association, with CEO Simon Birmingham advocating for Australia to emulate Europe's approach, aiming to create a more level playing field. The ACCC initially raised concerns about app store competition in 2021 and has drafted rules to mandate platform openness and prohibit 'anti-steering' provisions that hinder developers from directing users to cost-effective payment options. However, the government's legislative response remains pending.
Apple and Google defend their restrictions, citing privacy and security concerns. The legal arena has also witnessed this debate, with the Federal Court's ruling last year suggesting that the companies' market dominance may contribute to elevated commission rates, as evidenced in Epic Games' case. The government has demonstrated a willingness to challenge big tech on various fronts, including social media and news payments, but any action against US tech giants could potentially strain diplomatic relations with Washington.
