The Biden administration vindicates Elon Musk: Apple and Google harm competition

The Biden administration vindicates Elon Musk, arguing that Apple and Google’s digital app store model, including how they force developers to give a 30% commission on every in-app purchase, hurts users and developers.

A new report issued Wednesday by the U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA) says it has investigated the competitive landscape in the mobile app ecosystem and found that “the playing field is not level, which is harmful to developers and consumers. The report also makes several suggestions that could improve the ecosystem and open up competition.

The report ditches the Apple Store and Google Play (the two companies’ pre-installed app stores), saying they effectively “strangle” the competition. The investigation was initiated as part of a 2021 executive order on competition and included consultations with various industry stakeholders in private industry, civil society and academia, NTIA said.

The report summarizes what industry watchers already know: that the innovations made possible by mobile phones and downloadable apps are beginning to be overshadowed by market entry barriers facing developers, Apple’s excessive and restrictive rules, and of Google, the overly complicated app review and review process, and significant amounts developers are forced to pay in commissions to gain access to consumers’ devices.

“Our report shows that the mobile app store model has provided a number of benefits to both app developers and users, but it has also created competitive conditions which are not optimal”, stated in the report. “Apple and Google’s policies on 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.

These barriers impose costs on companies and organizations that offer new technology: apps lack capabilities, development and deployment costs are higher, customer relationships are damaged, and many apps don’t reach large numbers of users.”

In addition to summarizing the state of the app market, the new report makes several recommendations on how various areas can be improved to boost competition.

The report suggests, for example, a more transparent app review process and bans on rules (by Apple and Google) that limit other means of installing apps such as sideloading and support for payments to third-party developers, support by apps for links to developer websites, etc. .

Both Apple and Google disagreed with the report’s findings. To a large extent, Apple’s position is the same as always — that its rules are focused on providing safety for consumers. Google, meanwhile, points out that it offers more competition and choices. (The Android operating system, for example, already allows sideloading of applications from sources other than Google Play).

It is recalled that in earlier tweets published by Elon Musk, he opposed Apple’s 30% commission on in-app purchases and claimed that as the owner of the App Store he has “censored” other developers.

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