Australia’s Investigating Apple and Google’s App Store Practices Now

Australia’s Investigating Apple and Google’s App Store Practices Now
Two teenagers are posing with their Samsung Galaxy S4 (left) and iPhone 4 smartphones.

Apple and Google have been copping quite a bit of flack over their app store practices lately, and Australia has come to join the party. The Australian Competition and Consumer Commission (ACCC) is going to examine the experiences that Australians have with these app stores – from consumers to developers.

Apple and Google app stores

What the ACCC will be looking into is a bit of a mixed bag. The consumer watchdog has said it will be examining the competition between Google Play and the App store, the use and sharing of data and whether more price transparency is required in the local app market.

“Apps have become essential tools for daily living for many Australian consumers, a trend that is likely to have increased during the COVID-19 pandemic. Apps are, in turn, increasingly important for businesses as they promote, grow and run their enterprises,” ACCC Deputy Chair Delia Rickard said in a statement.

“We want to know more about the market for mobile apps in Australia, including how transparent and effective the market is, for consumers as well as those operating in the market. We will also focus on the extent of competition between the major online app stores, and how they compete for app sales with other app providers.”

The ACCC has released a survey that users, developers and suppliers can take in order to offer their experiences with these app stores in Australia. The findings will be part of the ACCC’s five-year inquiry into the markets that supply digital platform services in Australia.

Survey submissions close on 2 October 2020 and the final report will be delivered in March 2021.

This probably has something to do with the Apple Tax

So why is this important? First and fore mostly there’s the Apple Tax.

In general both Apple and Google take a 30 per cent cut of all in-app purchases from apps that are hosted on their platforms. Though there are some exceptions.

This has recently been in the public eye when both Google and Apple removed Fortnite from their stores when Epic Games allowed in-game currency to be bought directly within the app instead. This meant skipping the regular in-app payment method.

Epic further enticed players to pay directly by offering a 20 per cent discount on this payment method. Both Apple and Google removed Fortnite from the store, stating this move violated their store guidelines. Epic Games is now taking both companies to court over the matter.

Apple also threatened to remove Unreal Engine from iOS, which is also owned by Epic Games, but this was blocked by the courts.

The next hearing will be in a few weeks.

While this case is high profile due to Fortnite, this isn’t the first Apple has been publicly called out over its commission rates.  Basecamp, the developers of email management app Hey, went public with its own experiences before the Apple Worldwide Developers Conference (WWDC) back in June.

It was also first made public on the same day European authorities opened an antitrust investigation into Apple’s App store policies due to a 2019 complaint from Spotify and an unnamed audio book distributor.

The U.S. Department of Justice is also reportedly considering an antitrust probe of Apple due to its in-app purchasing policy.

How is this all relevant to Australia?

Apple and Google’s store practices are global, which means they impact Australian consumers, creators and suppliers.

Of course, one could argue that a simple option to avoiding the 30 per cent commission would be to not feature an app on either platform. But it’s really not that simple.

While there are more than two app stores available in Australia, such as Samsung’s Galaxy Store and Huawei’s AppGallery , they just aren’t used as much as Google Play or Apple’s App Store. Plus, the comparatively small amount of competition they offer is on Android only. There is no official app store competitor on iOS.

If you want to reach an audience, you have to pay up.

“For app developers and suppliers, gaining a spot in one of the major app stores can result in significant sales, while failing to gain access can be a major setback. We are keen to provide greater transparency on how this process works,” Ms Rickard said.

Considering the high profile court case and the noise regulatory bodies in the U.S. and Europe are making about app stores right now, the ACCC’s timing here is delicious.