WASHINGTON, D.C. – Rick VanMeter, Executive Director of the Coalition for App Fairness (CAF) released the following statement on the Australian Competition & Consumer Commission’s (ACCC) fifth interim report, part of their multi-year Digital Platform Services Inquiry:
“The findings from the ACCC reaffirm the reality developers face every day: the mobile application ecosystem is dominated by gatekeepers who use their market power to hinder competition, deter innovation, and impose unfair terms of service and fees. The report also serves as an important reminder that consumers, most of all, are harmed by these gatekeepers’ anticompetitive behaviors.
“We are encouraged by the specific codes of conduct recommended in this interim report, including measures to address self-preferencing, anticompetitive tying, unfair terms of service, and exclusive pre-installation and default agreements. Our members know just how harmful all of these practices are, and we remain committed to our efforts to end them.
“Together, the measures proposed by the ACCC would foster a more competitive marketplace, increase consumer choice, and drive down costs – all of which ultimately benefit Australian consumers. As the ACCC continues their inquiry, we look forward to continuing our work with the commission to help create a mobile app marketplace that is truly competitive and best serves consumers in Australia and around the world.”
The full ACCC report can be found here and the new competition recommendations are below:
Anti-competitive self-preferencing: Measures could prevent Designated Digital Platforms from providing favourable treatment to their own services over those of third- party providers in specific circumstances. Measures could also mandate data separation between information a digital platform collects in its role as an intermediary from its role as a rival in a related market. The ACCC is concerned about self-preferencing conduct by:
- app store providers, in their treatment of third-party app developers, including the ability to use data about third-party apps gained in operating an app store
- search providers, in their treatment of third-party content in search results
- ad tech providers, in their treatment of third-party ad tech providers.
Anti-competitive tying: Measures could prevent Designated Digital Platforms, in specific circumstances, from making the purchase or use of one of their services conditional on the purchase or use of another service they supply. The ACCC is concerned about tying conduct by:
- app store providers, in tying the supply of app store services to the use of their in-app payment services, and tying pre-installation of their app stores to the pre-installation of other apps that they offer
- ad tech services, in tying ad inventory to the use of their ad tech services.
Exclusive pre-installation agreements and defaults: Measures could prohibit Designated Digital Platforms from having their services exclusively pre-installed on devices; require Designated Digital Platforms to allow default services to be changed; or require Designated Digital Platforms to apply choice screens to reduce barriers to entry and allow greater access to users. The ACCC is concerned about such conduct by app store and search providers.
Frustrating consumer switching: Measures could prohibit conduct that frustrates consumer switching, including user interfaces that inhibit consumer choice and arrangements that limit a business user’s ability to communicate alternative payment options to its users. The ACCC is concerned about such conduct by app store, mobile operating system (OS) and search providers.
Denying interoperability: Measures could ensure that Designated Digital Platforms provide third parties with access to their hardware, software and systems that is equivalent to the access available to the platform’s own services, while allowing the Designated Digital Platform to protect the safety and integrity of their software and hardware as required. The ACCC is concerned about restrictions on interoperability that affect third-party app developers, browser engines and app stores.
Data advantages: Measures could require targeted data portability, access, or separation measures, as appropriate. However, careful consideration would need to be given to ensure any measures safeguard consumers’ privacy. These measures should not be considered for inclusion in any code until after the introduction of any privacy law reforms that result from the review of the Privacy Act.
Lack of transparency: Measures could require Designated Digital Platforms to make necessary information widely available and freely accessible to market participants. The ACCC is concerned about a lack of transparency in ad tech (specifically, auction, verification and pricing transparency), and the app review processes of app stores.
Unfair dealings with business users: Measures could restrict Designated Digital Platforms’ ability to impose unfair terms of service on business users, including clauses that restrict a business’s ability to exercise its rights (e.g. in respect of intellectual property). The ACCC is concerned about such conduct by app stores, but similar concerns could arise for any intermediary services offered by a Designated Digital Platform.
Exclusive agreements and price parity clauses with business users: Measures could prohibit Designated Digital Platforms from unnecessarily restricting business users from providing their products and services through other sales channels, or at different prices on other sales channels. While the ACCC has not identified widespread use of such clauses in any digital platform markets considered to date, if such clauses were used by a Designated Digital Platform, this would likely have significant implications for competition in the relevant market.
About the Coalition for App Fairness
The Coalition for App Fairness is an independent nonprofit organization formed to protect consumer choice, foster competition, and create a level playing field for all app and game developers globally. Originally formed by Basecamp, Blix, Blockchain.com, Deezer, Epic Games, the European Publishers Council, Match Group, News Media Europe, Prepear, Proton, Skydemon, Spotify, and Tile, CAF has rapidly grown from 13 to over 70 members since launching in September 2020. CAF offers membership to companies of any size — join today at appfairness.org.
November 11, 2022