Australia’s competition watchdog wants to reduce phone app duopoly of Apple and Google

People should be given a choice of apps other than the default Apple and Google phone apps when setting up a new device, under a raft of proposals from Australia’s competition watchdog to reduce the duopoly the two tech giants have over the app store marketplaces.

The Australian Competition and Consumer Commission’s latest interim report arising from the long-running digital platforms inquiry has found that while Apple and Google compete with each other, both companies face very little competition in app distributions on their respective mobile platforms.

For Apple, developers must use the App Store, while for Google, apps can be installed on Android outside of the Play store either through direct download or alternative marketplaces, but the ACCC found it is harder to attract users given Play is pre-installed on Android devices.

This has been the focus of lawsuits brought against both companies by Epic Games, the creator of the massively popular Fortnite game, after the game was kicked off both app stores for bypassing the in-app purchase systems both Apple and Google force developers to use.

The ACCC has made a number of proposed changes to improve competition in its app stores, including allowing users to choose via a “choice screen” between the default apps and third-party apps – for example between Apple’s weather app and a third-party app.

The watchdog also proposed developers be allowed to inform users of alternative payment options, and also proposed to limit the information Apple and Google could use from how apps perform in their respective stores with the rest of the companies’ operations.

“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.

“To address this market power, we believe 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,’” the ACCC chair, Rod Sims, said. “Apple and Google should also be prevented from using information collected about third-party apps to advantage their own competing apps.”

Sims did not rule out more regulation of the two companies if the concerns are not addressed.

An Apple spokesperson said the App Store requires all apps to meet the company’s “rigorous standards of privacy, security and content, offering our customers a safe and trusted place to download apps”.

“This unwavering commitment to bringing our customers the best experience is applied equally and evenly to all, including Apple’s own apps. We welcome the opportunity to continue this discussion with the ACCC.”

Comment has been sought from Google.

Epic Games’ case against Apple will begin in court in the United States next week. The Australian federal court issued a stay on the case in Australia to allow the case to run in the US. An Epic spokesperson welcomed the ACCC’s report on Wednesday and indicated the company was appealing the federal court decision, seeking to have the cases heard concurrently.

The inquiry found Australians had downloaded hundreds of millions of apps every quarter on Google’s Play store and Apple’s App Store in the past five years, with Facebook’s apps (Facebook, Messenger, Instagram and WhatsApp) taking out four of the top five most popular apps used daily in Australia, according to Sensor Tower data.

The only Australian company in the top 15 of the most popular apps in Australia is Commonwealth Bank’s CommBank app.

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