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App Store antitrust pressure builds as White House report says Apple inflates app prices

A new report commissioned by the White House has further added to the App Store antitrust pressure, concluding that the control exerted by both Apple and Google results in inflated prices for apps, as well as potentially diminishing innovation.

It effectively backs the changes introduced in proposed antitrust legislation that saw bipartisan support in Congress, but not enough to make it into law

App Store antitrust pressure

The App Store is Apple’s biggest antitrust headache, with regulators around the world concluding that it’s anticompetitive for the iPhone maker to have exclusive control over the sale of iOS apps.

Some developers argue that they are limited in what their apps can do by restrictions enforced by Apple – which in some cases prevent them from competing directly with the iPhone maker’s own stock apps, for example Wallet – and are forced to pay Apple 15% or 30% commission, which inflates the prices they have to charge to users.

Apple counters that its tight control of the App Store protects users from malware and other scam apps. The evidence shows the company is far from perfect at this, but the argument is that things would be worse without Apple’s review process.

White House report

The White House asked the National Telecommunications and Information Administration to investigate, and Axios reports that it also concluded antitrust legislation is required.

A new Biden administration report describes Apple and Google as “gatekeepers” of mobile app stores and suggests legislation is needed to spur competition and give app makers and consumers more choices […]

There is “real potential harm for consumers” in the way Apple and Google run their app stores, with the companies “inflating prices and reducing innovation,” Alan Davidson, NTIA administrator, said in a call with reporters.

Biden administration officials say that that both the Justice Department and the Federal Trade Commission should be guided by the report, treating it as policy advice.

Apple has been lobbying against antitrust action in the US, spending a record sum on this last year. American Choice and Innovation Online Act sponsor Senator Amy Klobuchar says that her bill was blocked by an “incredible onslaught of money” from lobbyists.

However, the Cupertino company does seem to have internally acknowledged that it’s likely to lose this battle, and is dedicating “significant resources” to allowing alternative app stores onto the platform.

Photo: Ana Lanza/Unsplash

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