ACCC calls out Google, Apple for mobile app store dominance

The Australian Competition and Consumer Commission has found Google’s and Apple’s mobile app stores have significant market power in the distribution of mobile apps in Australia, and that developers need fair and reasonable terms when dealing with them.

The findings were published in the agency’s second Digital Platform Services Inquiry interim report, saying that measures should be placed to address the competition concerns.

The report includes the ACCC’s potential measures, including that consumers be able to rate and review all apps and have the ability to change any pre-installed default app on their device, and that app developers be allowed to provide consumers with information about alternative payment options and that information collected by Apple and Google in their capacity as app marketplace operators be ring-fenced from their other operations.

“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,” ACCC chair Rod 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.”

Sims said app developers should have more information about how their apps are made discoverable to consumers and that consumers should have the ability to change or remove any pre-installed or default apps.

Apple and Google also should be prevented from using information collected about third-party apps to advantage their own competing apps, added Sims.

“The ACCC is also concerned with restrictions imposed by Apple and Google which mean developers have no choice but to use Apple and Google’s own payment systems for any in-app purchases,” Sims said.

“Further while Apple and Google have made efforts to remove malicious apps from the app stores, we believe they could do more to prevent and remove apps that feature, for example, subscription traps and other scams.”

“There is a clear need for better redress and dispute resolution for consumers who are harmed by these sorts of apps, or who have disputes over payments and other issues. This situation reinforces the need for an external dispute resolution body for digital platforms including Apple and Google, as previously recommended by the ACCC.”

The ACCC said it would revisit the issues raised in the report during its five-year Digital Platform Services Inquiry and would take into account any steps made by Apple and Google to address the concerns.

“The ACCC will also take into account significant proposals and law changes in other countries which have identified similar concerns. Regulation may be required if Apple and Google fail to take steps to address the concerns identified,” Sims said.