The Biden Administration is calling on tech giants Apple and Google to “do better,” saying their mobile app stores stifle competition.
The Commerce Department released a report Wednesday, in which the National Telecommunications and Information Administration said the current app store model, dominated by Apple and Google, is “harmful to consumers and developers” by inflating prices and reducing innovation. It goes on to say that the tech giants have a stranglehold on the market that squelches competition.
“The policies that Apple and Google have in place in their own mobile app stores have created unnecessary barriers and costs for app developers, ranging from fees for access to functional restrictions that favor some apps over others” the report said.
“We are also calling on Apple and Google to do better,” said Alan Davidson, Assistant Secretary of Commerce.
The report outlines changes officials would like to see, but concedes that new legislation and enforcement would be needed to fully make them happen.
“One potential solution to many of the structural issues present in the current app ecosystem is increased antitrust enforcement, both domestically and internationally,” said the report, which was developed in consultation with officials at the Federal Trade Commission and the DOJ’s Antitrust Division.
Meanwhile, there is a legal battle already playing out in the courts over app stores. Apple is defending the area around the iPhone’s app store, known as a “walled garden,” claiming it is crucial for consumers who want to best protect their personal information.
Google has also long defended itself against claims of monopoly in various areas.
Congress entered the debate back in 2021, introducing a bill called the “Open App Markets Act.” At the time, lawmakers charged Apple and Google of using gatekeeper control to stifle competition, and they proposed a series of new rules to limit things like self-preferencing. The bill was eventually shelved amid lobbying by tech CEOs.
In response to the Commerce Department’s Wednesday report, an Apple spokesperson said, “We appreciate the report acknowledges the importance of user privacy, data security, and user convenience. Nevertheless, we respectfully disagree with a number of conclusions reached in the report, which ignore the investments we make in innovation, privacy, and security—all of which contribute to why users love iPhone and create a level playing field for small developers to compete on a safe and trusted platform.”
A spokesperson from Google said, “We disagree with how this report characterizes Android, which enables more choice and competition than any other mobile operating system.”