Conservative groups ask senators to keep app market open

FIRST ON FOX: A group of conservative policy organizations on Monday sent a letter to U.S. senators asking them to keep the app market open and free from anti-competitive practices.

The groups, led by the American Principles Project, are urging senators to pass the Open App Markets Act, which bipartisan Sens. Richard Blumenthal, D-Conn.; Marsha Blackburn, R-Tenn.; and Amy Klobuchar, D-Minn., introduced in August 2021.

The legislation aims to allow app developers to tell consumers about lower prices and competitive offers, prevent side loading, open opportunities for startup apps and third-party app stores and prevent app stores from taking advantage of developers.

"Gatekeeper control over [iOS and Android] operating systems and their app stores allow these two companies, Apple and Alphabet (Google), which have a combined market capitalization of more than $4 trillion, to exclusively dictate – without checks and balances – the rules of the road for app developers," the organizations wrote in the Monday letter. 

"This monopoly power stifles innovation and competition, hurts consumers and small businesses and creates an unequal playing field where some app developers are required to pay a 30 percent tax," they wrote.

The legislation stems from the Senate antitrust subcommittee's hearings last year during which tech companies Spotify, Tile and Match Group testified that Apple and Google's respective app store policies stifled competition among apps.

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The American Principles Project, along with the Claremont Institute, Digital Progress Institute, Bull Moose Project, Consumer Action for a Strong Economy and Internet Accountability Project sent the letter just days after the Justice Department and 35 state attorneys accused Apple of hurting competition in briefs filed in the U.S. Court of Appeals for the Ninth Circuit.

Epic Games' lawsuit against Apple began when it announced plans to implement its own in-app payment system in Fortnite last year to avoid paying Apple a commission fee of up to 30%. In response to the move, Apple removed Fortnite from its app store and restricted access to its iOS developer account. Epic fired back with an antitrust lawsuit, accusing Apple of using its app store to stifle competition.

The briefs back Epic Games' recent appeal against a ruling in Oakland, California, district court. The ruling found Apple's commission fees were not anti-competitive, but that the tech giant did engage in some anti-competitive behavior under California's Unfair Competition law.

Google has also faced accusations of anti-competitive behavior in recent years. In 2020, for example, a bipartisan coalition of attorneys general from 38 states, led by Colorado Attorney General Phil Weiser, filed a new antitrust lawsuit against Google, accusing it of squashing its competitors in the general search marketplace and its prevalence in smart-home products.

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Additionally, Google and Apple have been accused of working together to promote their own products.

"The bottom line is that the current system is rigged," the organizations wrote to senators. "Some app developers get special treatment from the monopolists, others are forced to pay a 30 percent tax, while others have a massive barrier to entry. Meanwhile, consumers are left holding the bag to pay higher prices with less choice. It’s time to bring competition back into the market. The Open App Markets Act will help make it happen."

An Apple spokesperson previously told FOX Business in a statement about the Open App Markets Act that the company has "always put" its users "at the center of everything" it does and that the App Store is "the cornerstone" of its "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," the Apple spokesperson added. 

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Google has previously noted that device makers and carriers already have the freedom to preload competing app stores alongside Google Play while consumers can sideload apps. It has also said 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. 

FOX Business' Lucas Manfredi contributed to this report.