The Biden administration is targeting Apple and Google for operating mobile app stores that it says stifle competition. The finding is contained in a Commerce Department report released by the administration on Wednesday. (Gene J. Puskar, Associated Press)
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WASHINGTON — The Biden administration is targeting Apple and Google for operating mobile app stores that it says stifle competition.
The finding is contained in a Commerce Department report released by the administration on Wednesday as President Joe Biden was to convene his Competition Council for an update on efforts to promote competition and lower prices.
And on another competitive front, the Consumer Financial Protection Bureau continued its efforts to limit late fees on credit cards.
The Commerce Department’s National Telecommunications and Information Administration report says the current App Store model – dominated by Apple and Google – is “harming consumers and developers” by inflating prices and cutting innovation. Companies have a stranglehold on the market that stifles competition, he adds.
“The policies that Apple and Google have in place in their own mobile app stores have created unnecessary barriers and costs for app developers, ranging from access fees to functional restrictions that favor certain apps over to others,” the report said.
In a Wall Street Journal op-ed in January, Biden called on Democrats and Republicans to rein in big tech companies without mentioning Cupertino, Calif.-based Apple and Mountain View, Calif.-based Google.
“On an equal footing”
“When tech platforms get big enough, many find ways to promote their own products while excluding or disadvantaging competitors — or charging competitors a fortune to sell on their platform,” Biden said. “My vision for our economy is one in which everyone – small and medium-sized businesses, mom-and-pop shops, entrepreneurs – can compete on equal footing with the biggest corporations.”
An Apple representative told The Associated Press that “we respectfully disagree with a number of conclusions drawn in the report, which ignore the investments we are making in innovation, privacy and security – which help all about why users love the iPhone and create a level playing field.” small developers to compete on a secure and reliable platform.”
And a Google spokesperson said the company also disagreed with the report, namely “how this report characterizes Android, which allows for more choice and competition than any other operating system mobile”.
A legal battle over App Store dominance is already unfolding in court.
“Enforcement of Antitrust Laws”
Apple has championed the area surrounding its iPhone app store, known as the Walled Garden, as a must-have feature prized by consumers who want the best protection available for their personal information. It said it faces significant competition from various video game alternatives on its iPhones. And Google has long defended itself against monopoly claims.
The Commerce Department report says “new legislation and additional antitrust action are likely needed” to spur competition in the app ecosystem.
Alan Davidson, the NTIA administrator, told reporters that the report “identifies where legislation would be needed to address some of these issues.”
Limit credit card late fees
Meanwhile, the White House said the Consumer Financial Protection Bureau would move forward with a proposed rule to limit credit card late fees, which the bureau says would allow save consumers approximately $9 billion in late fees per year.
Rohit Chopra, director of the office, said the rule is expected to reduce typical late fees from around $30 to $8 for missed payments and could take effect as early as 2024.
“Historically, credit card companies have charged relatively low penalties for missed payments, but once they discovered that these fees could be a source of easy profit, late fees skyrocketed with an increase in the 2000s,” Chopra told reporters. “And in recent years, those late fees have soared to $41 for a missed payment. Those fees add up, with consumers being hit with $12 billion a year in late fees on top of billions of dollars in ‘interest they are. paying.’
The bureau is the country’s financial monitoring agency created after the Great Recession.