What the Open App Markets Act Means for the Future of Big Tech

Google and Apple paint a beaded apocalyptic picture of the ramifications of the Open App Markets Act. They are quick to say that their closed app stores are necessary for our security and privacy. But the reality is that they are greedy, monopolistic rent-seekers, terrified of being forced to open up their platforms and, more importantly, part with a few billion dollars of pure profit.

Most people don’t realize that Apple and Google collect 30% of every purchase, microtransaction, and subscription on the App Store. And although the two have decided to reduce this to a “generous” 15% in some cases, this feint towards self-regulation still leaves much to be desired.

While still in the introductory phase, the Open Application Markets Act If passed, it would essentially dismantle the app market duopoly held by Apple and Google. This law is a cog in a larger wheel of reform, the US Online Innovation and Choice Act, which targets big tech companies. for violation of antitrust laws and consumer choice.

This will provide many wins for app developers, as well as anyone interested in curbing anti-competitive behavior in the open market (hint: that should be most of us). The biggest change would be that Apple (or similar companies) can no longer require developers to use or allow in-app purchases as a condition of app distribution. App stores will also no longer be able to require price matching of hosted apps.

It will also prohibit punitive actions against developers for using different pricing terms. And that means app stores can’t stop developers from talking directly to their users about alternative pricing or payment methods. Phones would no longer default to the manufacturer’s app store, and developers would have additional protection against competitors using nonpublic information to develop copycat apps. Finally, the law would require Apple to allow sideloading and alternative app stores, like the ones we might see for gaming platforms like Steam and Epic. You can see why Apple is pushing so hard against this.

The law would have huge implications for big tech companies and tech regulation, and it could change the outcome of some ongoing cases. Right now, Epic Games is calling on the Epic vs. Apple decision from 2021. The lawsuit stems from Epic Games circumventing the 30% processing fee that Apple charges all developers for in-app purchases. Epic pushed Fortnite users to buy its in-game currency directly from Epic Games instead of Apple’s App Store payment system. Apple demanded that Epic update its app and eventually removed Fortnite from the store when Epic refused. The judge ruled in favor of Apple, saying Epic did not suffer irreparable harm as a result of the removal of the App Store.

Taxing the hard work and innovation of others in app development seems inherently unfair and, quite frankly, infuriating. This is what this act stands against, and this This is exactly why Epic sued Apple and appealed the decision. Another of the objectives of the law is to regulate large technologies and protect the future of technology. It’s the Wild West right now, which is how companies like Apple, Google, and Amazon have monopolized the industry so far.

The new law would level the playing field: app developers and consumers would have other ways to distribute and download apps. The dreaded “Apple tax” would no longer be mandatory, as app stores could no longer force people to make in-app purchases for subscriptions. This would change the market economy of the App Store itself and give startups a boost, which would no longer be handcuffed by the 30% charge.

It’s worth exposing Apple and Google’s fearmongering around this act as exactly that. We already have a perfect example of the opposite in our computers: Windows and OS X allow us to install and run any software we want. Apple and Google claim that their mobile operating systems are inherently and inviolably an ecosystem, but that’s simply not true.

Even if the Open Markets Act is passed, I don’t foresee a mass shift of consumers from major app stores to their devices. Proprietary integrations still offer a few nice features, namely the convenience of undoing and some privacy measures. The move would, however, initiate a sea change in mobile gaming. Apple and Android both derive a significant portion of their revenue from mobile games, and if they’re forced to allow Steam and Epic on their phones, they won’t be happy. Perhaps more importantly, the shift around in-app purchases will empower a new generation of startups.

At this point, the power is in the hands of Congress. The bill’s language and details swing for fences by removing in-app purchase requirements and allowing external app stores to emerge. Law enforcement allows plaintiffs (app developers) to act aggressively against app stores. Essentially, as an app developer, you can follow in Epic Games’ footsteps and point out how in-app purchases and other existing app store rules and restrictions impeded your success, and then seek damages for that. The ability of app developers to sue is a game-changer.

To me, this law basically boils down to the fact that taxing someone else’s innovation and creativity is wrong and restricting what we can install on our devices seems anti-competitive. The big tech companies are a bit too comfortable with the huge profits they rake in; with this act, they will be forced to face the underdogs.

Chris Cardinal is one of the main founders of Synapse Studios.

Previous 9 business card ideas – Forbes Advisor
Next Number of unemployed up to 15,600, underemployment soared to 50,600 in May-July