US inches closer to breaking the mobile app store duopoly

Legal gavel and smartphone

A piece of legislation that seeks to limit the amount of control Apple and Google have over their app stores has been approved by the US Senate Judiciary Committee.

Right now the two platform owners have almost complete control over the apps offered through their app stores, including the nature of customer billing relationships. High profile cases such as Apple vs Epic have brought this issue to the foreground, and to the attention of US lawmakers at a time when trust-busting Big Tech is very fashionable in Washington.

The matter feeds into the broader matter of politicians and regulators playing catch-up with the small cabal of US tech giants that dominate the digital economy, whether it be directly through owning consumer-facing platforms or indirectly by hosting much of that activity. Apple and Google operate clear monopolies in the provision of apps through their platforms and that’s clearly harmful to the consumer.

The Open App Markets Act seeks to address this imbalance but is far from straightforward since these monopolies evolved organically and nobody had a problem with them for a decade or so. Additionally, Apple and Google argue they need to operate monopolies for quality control and security purposes. There may be some validity to that argument, but they could always assist third party app stores in those respects so it doesn’t feel like a slam dunk.

This is a bipartisan bill, which means it has a better than usual chance of becoming law. Here are Democrat Senator Richard Blumenthal and Republican Senator Marsha Blackburn reflecting on the progress of the bill.

If you feel like reading the bills themselves, the Register has linked to them. The piece reflects on the concept of ‘rent seeking’, a well-known economic term that describes the often parasitic relationship between the owners of a scarce resources and those who economically depend on them. In our view, Big Tech is in the position to seek rent from the entire digital economy, so it’s right and proper that legislators seek to moderate that power. Let’s hope this bill isn’t just used as a bargaining chip to force those companies to do the state’s bidding.

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