The Biden administration launched its most venomous attack yet on Apple and Google’s app stores on Wednesday, accusing the two tech titans of wielding “gatekeeper” power that has resulted in “suboptimal” levels of competition in digital markets.
The Commerce Department report concludes that Apple (AAPL) and Google (GOOG) “play a significant gatekeeping role by controlling (and restricting) how apps are distributed,” and that the various fees and rules imposed on app developers have created an uneven playing field.
“All of these factors translate to potential losses for consumers: inflated prices due to gatekeeper fees, innovation hampered by policy decisions to limit access to smartphone capabilities, and a loss of choice of apps that are not featured or even accessible for smartphone users,” according to the report.
The 48-page report adds the White House’s weight to mounting public criticism of dominant app stores, which has resulted in multiple private lawsuits against Apple and Google in recent years, as well as investigations by European antitrust regulators and reports of a Justice Department investigation.
Apple stated in a statement that its app store benefits developers and supports hundreds of thousands of jobs. Apple has previously claimed that its control over iOS app distribution promotes users’ privacy and security.
“We respectfully disagree with a number of conclusions reached in the report,” an Apple spokesperson said, “all of which contribute to why users love iPhone and create a level playing field for small developers to compete on a safe and trusted platform.”
Google has stated that, unlike Apple, its Android operating system allows for competing app stores.
“We disagree with how this report characterises Android, which allows for more choice and competition than any other mobile operating system,” said a Google spokesperson. “[The report] recognises the importance of interoperability, multiple app stores, and sideloading, all of which are already supported by Android’s open system – all while ensuring privacy and security.”
The report issued on Wednesday by a Commerce Department office tasked with advising the president on technology issues does not initiate a regulatory process. Instead, it makes policy suggestions, such as limiting the apps that Apple and Google can pre-install or set as defaults on their respective operating systems, or granting users the ability to instal apps from any source.
The report also advocated for increased budgets for US antitrust enforcers, a ban on some app store restrictions pertaining to in-app payments, and a federal privacy law establishing clear data privacy standards.
Many of the recommendations in the report are similar to provisions in federal legislation that received bipartisan support in the previous Congress but did not become law.
Public comments submitted to the Department in the months preceding the report had influenced the findings.
