ACCC to probe Apple and Google app store practices

Australia's competition regulator is to investigate Apple and Google's app stores amid growing scrutiny over their alleged 'monopolistic' practices.

The Australian Competition and Consumer Commission said Tuesday (September 8) it is actively seeking views from consumers, app developers and suppliers about the experience of using apps and working with app marketplaces, to inform a new report.

The report will focus on the competitiveness, efficiency, transparency and effectiveness of markets for the supply of app marketplaces, the ACCC said. It is part of the regulator's broader five-year inquiry into the practices of digital platforms in Australia and whether they promote a fair marketplace.

After releasing details of a hotly contested proposed news media bargaining law and a framework designed to tackle online misinformation, the ACCC is now turning its attention to potential competition and consumer issues within app stores. Specifically, the Apple App Store and the Google Play Store, which are collectively used in over 99% of smartphones worldwide, the report cites.

In particular, the ACCC is seeking views on:

1. The ability and incentive for Apple and Google to link or bundle their other goods and services with their app marketplaces, and any effect this has on consumers and businesses.
2. How Apple and Google’s various roles as the key suppliers of app marketplaces, but also as app developers, operators of the mobile licensing operating system and device manufacturers affect the ability of third party app providers to compete, including the impact of app marketplace fee structures on rivals’ costs.
3. Terms, conditions and fees (including in-app purchases) imposed on businesses to place apps on app marketplaces.
4. The effect of app marketplace fee structures on innovation.
5. How app marketplaces determine whether an app is allowed on their marketplace, and the effect of this on app providers, developers and consumers;
6. How where an app is ranked in an app marketplace is determined.
7. The collection and use of consumer data by app marketplaces, and whether consumers are sufficiently informed about and have control over the extent of data that is collected.
8. Whether processes put in place by app marketplaces to protect consumers from harmful apps are working.

It is inviting submissions on these matters by October 2, and will provide the report to the treasurer by March 31. 

ACCC deputy chairwoman Delia Rickard said of the probe: "Apps have become essential tools for daily living for many Australian consumers, a trend that is likely to have increased during the COVID-19 pandemic. Apps are, in turn, increasingly important for businesses as they promote, grow and run their enterprises."

"We want to know more about the market for mobile apps in Australia, including how transparent and effective the market is, for consumers as well as those operating in the market," Rickard said. "We will also focus on the extent of competition between the major online app stores, and how they compete for app sales with other app providers."

The probe comes amid growing tension over app store policies, in particular Apple's payment terms. While app developers and publishers have been calling out the 30% fee that Apple charges on all app transactions for some time now, this issue was thrown into the public spotlight last month after game developer Epic Games orchestrated a string of events in which its popular Fornite game was banned, in order to file an antitrust lawsuit against Apple and Google.

The world's major news organisations joined the battle against Apple's app store practices shortly after, demanding clarity on how certain companies are given better financial terms than others.