New bipartisan bill targets Apple, Google app store payment systems

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A new bill introduced on Wednesday by Sens. Richard Blumenthal, D-Conn., Marsha Blackburn, R-Tenn., and Amy Klobuchar, D-Minn., is looking to break up the power of Apple and Google's app store payment systems.  

The legislation, dubbed the Open App Markets Act, aims to set "fair, clear, and enforceable rules to protect competition and strengthen consumer protections within the app market," the lawmakers said.

The bill would give developers the option to avoid using tech companies' existing app store payment systems. It would also bar tech giants from retaliating against developers who choose to offer lower prices through a separate app store or via their own payment systems. The proposal would also prohibit tech giants from using nonpublic data to build products that would compete against developers using their service. 

In addition, the Federal Trade Commission and state attorneys general could take action against the platforms, and developers would be entitled to sue for injunctive relief.

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Blumenthal said the legislation will "tear down coercive anticompetitive walls in the app economy, giving consumers more choices and smaller startup tech companies a fighting chance." 

"For years, Apple and Google have squashed competitors and kept consumers in the dark—pocketing hefty windfalls while acting as supposedly benevolent gatekeepers of this multi-billion dollar market," he added. "This bipartisan bill will help break these tech giants’ ironclad grip, open the app economy to new competitors, and give mobile users more control over their own devices."  

Blackburn argued that big tech is "forcing their own app stores on users at the expense of innovative start-ups."  

"Apple and Google want to prevent developers and consumers from using third-party app stores that would threaten their bottom line," she said. "Their anticompetitive conduct is a direct affront to a free and fair marketplace."

Klobuchar emphasized that competition in the app market is critical to "protecting small businesses and consumers, spurring innovation, and promoting economic equity."

"As mobile technologies have become essential to our daily lives, it has become clear that a few gatekeepers control the app marketplace, wielding incredible power over which apps consumers can access. This raises serious competition concerns," Klobuchar said. "By establishing new rules for app stores, this legislation levels the playing field and is an important step forward in ensuring an innovative and competitive app marketplace."

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The proposal from lawmakers comes after Fortnite creator Epic Games launched a legal battle with Apple last year over its decision to install an in-app payment system in the popular video game to skirt paying the tech giant's commission fees, which range between 15% and 30%

Epic has requested a court injunction that would take many of the same actions outlined in the Open App Markets Act. The case is under review by a federal judge to determine whether Apple violated antitrust law through its current app store policies and actions against Epic since the launch of its in-app payment system. 

Epic has also taken legal action against Google for its app store policies, as have a group of state attorneys general, alleging the company has unlawfully worked to maintain a monopoly over Android users. 

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An Apple spokesperson told FOX Business in a statement that the company has "always put our users at the center of everything we do" and that the App Store is "the cornerstone of our work to connect developers and customers in a way that is safe and trustworthy," resulting in an "unprecedented engine of economic growth and innovation, one that now supports more than 2.1 million jobs across all 50 states."

"Our focus is on maintaining an App Store where people can have confidence that every app must meet our rigorous guidelines and their privacy and security is protected," Apple added. 

Though Google declined to comment directly on the legislation, the company notes device makers and carriers already have the freedom to preload competing app stores alongside Google Play while consumers can sideload apps. It also says developers are permitted to communicate with customers outside its app store about subscription offers or lower-cost offerings on rival app stores or developers' websites. 

According to Google, approximately 97% of developers do not sell digital content on Google Play and are not subject to the app store's service fees, while less than 0.1% of developers who do sell digital content are subject to a 30% service fee on some transactions. In addition, the company claims that the openness of Android allows developers who disagree with its policies to continue to distribute their apps to its users both directly and through rival app stores without using its billing system or paying anything.

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