White House agency calls for app store regulation

The US National Telecommunications and Information Administration (NTIA) released a report on February 1st, which concludes that the mobile app store model is harmful to consumers and developers. See the full report linked here.

The report echoes the widely held view that Apple and Google have exploited their duopoly in mobile operating systems to lock developers into their owned app stores, facilitating both companies’ extraction of monopoly rents. This increases costs and restricts innovation, which ultimately hurts the consumer.

The NTIA concludes that “new legislation and additional antitrust enforcement actions are likely necessary to boost competition in the app ecosystem.” Unfortunately, the Open App Markets Act which would remedy the demonstrable harm in app markets failed to pass last term.

Whether the Act passes into law or not is unclear – the bill’s sponsor has stated his intention to re-introduce the legislation in this session. However, it is undoubtedly positive to see governments united on this issue.

The report notes that the CMA has launched a parallel investigation in the UK with its mobile browsers and cloud gaming investigation, and within the European Union, the Digital Markets Act (DMA) will per se prohibit restrictions on competing channels.

This cognisance of work by regulatory counterparts demonstrates an unusual degree of coordination between Europe and the US.