Senate Judiciary Committee approves app store antitrust bill

The Senate Judiciary Committee today approved the Open App Markets Act, a bipartisan antitrust bill that would require Apple Inc. and Google LLC to change how they operate their app stores.

The Open App Markets Act was originally introduced in the Senate last August by senators Richard Blumenthal, Marsha Blackburn and Amy Klobuchar. The rules specified in the bill would apply to app stores that have more than 50 million users in the U.S, which covers both Apple’s App Store and Google Play. 

One section of the proposed legislation focuses on in-app purchases. Today, Apple and Google in most cases require that mobile developers only process in-app purchases using their respective payment systems. The companies take a commission of 15% to 30% from transactions. 

The Open App Markets Act would require Apple and Google to let developers process in-app purchases using competing payment systems. Moreover, the bill specifies that app store operators may not take “punitive action against a developer for using or offering different pricing terms or conditions of sale through another in-app payment system or on another app store.”

The bill also contains several other rules that Apple and Google would have to follow. 

The Open App Markets Act specifies that app store operators must allow developers to reach out directly to their users “concerning legitimate business offers” such as new services. Additionally, Apple and Google may not use “non-public business information derived from a third-party App for the purpose of competing with that App.” The bill also seeks to prohibit app stores from giving an unfair advantage to their apps or those of business partners in rankings. 

Another section of the Open App Markets Act focuses on the role of operating systems in the mobile app ecosystem. Apple currently allows users to download apps onto its mobile devices only from the App Store. The bill would require the iPhone maker to let customers “install third-party Apps or App Stores through means other than its App Store.” Google already allows users to download apps from sources other than Google Play.

Apple and Google both expressed concerns over the bill. 

“We are deeply concerned that the legislation, unless amended, would make it easier for big social media platforms to avoid the pro-consumer practices of Apple’s App Store, and allow them to continue business as usual,” Apple reportedly stated in a letter to Judiciary Committee leaders. “It does so by mandating that Apple allow the sideloading of apps and app stores that need not comply with the App Store’s pro-consumer privacy protections.”

Google said in a statement that ″this bill could destroy many consumer benefits that current payment systems provide and distort competition by exempting gaming platforms, which amounts to Congress trying to artificially pick winners and losers in a highly competitive marketplace.” 

The Judiciary Committee approved the Open App Markets Act in a 20-2 vote. The bill is now headed to vote before the full Senate. 

Today’s vote comes only a few weeks after the Judiciary Committee approved the American Innovation and Choice Online Act, another antitrust bill focused on the tech industry. The bill seeks to prevent major digital platform operators from implementing business practices that unfairly favor their offerings over those of rivals. 

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