Google’s struggling with an image problem right now. Ever since Epic decided to pull something of a stunt with the in-app purchase systems in Fortnite, the status of both Google and Apple as the gatekeepers of the mobile app world has been called into question. Google is facing regulatory scrutiny in the US, and now it looks like Australia wants to get in on the party.
Well, sort of. The Australian Competition and Consumer Commission (ACCC) issued a report stating that Google and Apple have “significant market power in the distribution of mobile apps,” and that “measures” are needed to change the status quo. The report stops short of calling for new legislation beyond the Competition and Consumer Act of 2010, which the Commission is in charge of enforcing. But it does say that developers of apps need more information on how their apps appear in search results, especially in relation to competing apps from Google itself.
Other recommendations in the report include giving consumers more options to change pre-installed default applications, that consumers be given information on paying for in-app purchases outside of Google/Apple payment systems, and that better protection against malicious apps and subscription scams should be put in place. The Commission reiterates a recommendation for an external dispute resolution for consumers “harmed by these sorts of apps.”
The ACCC is giving Google and Apple until 2025 to make changes on their own, with the full report due at the end of that time. It says that if the companies don’t “take steps to address the concerns identified,” it might recommend new regulations for the Australian app market. This case is separate from Google’s ongoing woes in the country over paying publishers for Search results.
Compared to active regulatory measures in the US, Australia’s efforts seem a little toothless. The report also doesn’t really address the differences between iOS and Android, which Google has hastened to point out elsewhere: users can install third-party apps (and even app stores) on Android without any modification of their phones. That means that, while it’s certainly not as simple or easy as using the Play Store, consumers have access to apps and payment methods not blessed by Google.
The report’s highlight of the way Google favors its own apps in terms of both pre-installation on Android phones and when searching for alternatives on the Play Store has more of an immediate bite. There’s no denying that Google profits enormously from being the de facto standard provider of most services on Android devices, or at least those devices which make it into the hands of the vast majority of users. Google’s latest quarterly report shows that it’s making tens of billions of dollars every year on search, YouTube, and cloud services, driven in no small part by mobile users. One can hardly blame Google for optimizing its own operating system to make itself money … but neither can one deny that this is tiptoeing into the kind of self-dealing behavior that draws attention from economic regulators.
Google is indeed taking at least some steps to get the heat off of its current competition woes. It recently announced a more generous split for revenues in the Play Store (though that mostly affects small indie developers making a tiny slice of the total revenue in the store). And starting with Android 12, third-party app stores will have access to APIs that give it better integration with Android in general, potentially raising them to first-class citizen status.
But there’s no denying that Google is sweating at the moment. Multi-billion-dollar fines like the ones the company got from Europe would be a relief, with the worst-case scenario being full monopoly-busting regulatory action. Significantly, the ACCC’s report says that the Commission will “take into account significant proposals and law changes in other countries which have identified similar concerns.”
Image credit: Croozi