Opening up the app store

Read the full article featuring Alina Popescu’s comments in Digital Bulletin’s Issue 32 here, on pages 10-13.

The internet is a vast space with infinite potential for innovation, particularly when it comes to smartphone applications. However, at the moment, two companies have full control of the two dominant operating systems, which allows them to exclusively dictate the terms of the app market.

Last August, a bipartisan group of US senators introduced a new bill that aims to address this issue. The draft piece of legislation, known as the Open App Markets Act (OMA), with the goal of shaking up the structure of Google and Apple’s mobile operating systems.

The proposed legislation would require Google and Apple to allow third-party apps and app stores within their operating systems, as well as prevent them from blocking developers that tell users about lower prices for their software that they could find outside official app stores.

Nevertheless, the OMA is not the first piece of legislation of its kind. The draft law continues a series of regulatory initiatives such as the EU Digital Markets App and the UK’s digital markets plans that aim to prevent Big Tech from obtaining “undue advantages” from the use of digital platforms under their control.

“These regulatory initiatives are generally to work in conjunction with competition policy tools, which remain applicable but have obviously been deemed as insufficient in the fight against potential abuses by Big Tech,” explains Alina Popescu, a partner at legal firm MPR Partners. “Whilst the said proposals have common denominators – such aiming to ensure competition between app stores via interoperability – they differ considerably in places. For instance, unlike the DMA and the UK Proposal, which target companies with entrenched and durable positions on the market, the OMA seems to be simply addressed to all companies controlling app stores with a certain number of users in the US. Whilst this approach may offer more legal certainty and less complex procedures for designation of gatekeepers, it is bound to have the high interventionist, ex ante policy options enshrined in the OMA applying to companies whose positions may in reality be contestable.”