Feds should bust app-store monopoly in the Digital Age

Congress should pass the App Store Freedom Act. It addresses the structural bottleneck that allows many of these problems to persist. When genuine competition is restored in app distribution, incentives will shift. Fees will come down, interoperability will improve, safety protections will strengthen, and innovation will accelerate.”

OPINION — Over time, a select few Big Tech companies have quietly normalized their dominance of app distribution, and Americans have largely accepted it.

Apple is the clearest example: The App Store is the only authorized channel through which iPhone users can download apps, giving Apple unchecked control over which developers succeed, what fees they pay, the margins they make and what child-safety protections are or are not deployed. 

Florida Republican Rep. Kat Cammack’s App Store Freedom Act seeks to restore competition to digital marketplaces by addressing app-store monopolies at their source. If enacted, consumers could benefit from lower prices, stronger safety protections and more innovative technologies. To understand why this legislation matters, it is important to understand the scope of Apple’s control. 

The iPhone is among the most important technological platforms in modern life. It is how Americans communicate, conduct business, access information and manage their families’ digital lives. Yet, Apple does not merely manufacture the device, it controls the operating system, the camera, default apps — such as Safari and Apple News and the App Store.

The App Store is the only authorized place to download third-party apps. It is a level of vertical control that monopolies of the past could only dream. 

The last time a company exerted this degree of control over a digital platform, the federal government intervened. Almost 30 years ago, the Justice Department sued Microsoft for illegally tying its Windows operating system to Internet Explorer, foreclosing competition in the browser market. The court found that one company should not control both the platform and the gateway through which competitors must pass.

Much has changed since then, but the law has not. The Sherman Act is more than 130 years old, and while technology has advanced, monopolization remains illegal. 

The Justice Department and 20 state attorneys general are now suing Apple, alleging that it has illegally maintained its smartphone monopoly through technical and contractual restrictions that suppress competition and technologies that would make it easier for users and developers to leave its ecosystem. 

Smartwatch makers are blocked from accessing the iMessage APIs necessary to offer full messaging functionality, forcing consumers who want that feature to buy an Apple Watch. Developers are forced to raise prices for iPhone users to offset App Store fees that reach 30% of in-app purchases. Companies building cross-platform services must design around restrictions that do not apply to Apple’s own products. 

Current litigation and several reform proposals address important concerns, but many treat symptoms rather than the root cause. Stronger age ratings and enhanced parental notifications are important, but they leave the underlying structural problem intact. When one company controls the only authorized distribution channel on a dominant platform, it decides unilaterally which safeguards to implement, which fees to impose and which competitors can access core functionality. Restoring competition in app distribution will allow market forces to drive improvements in safety, affordability and innovation — outcomes no single gatekeeper has an incentive to deliver on its own. 

That is why the Coalition for a Competitive Mobile Experience and ACLJ Action recently hosted a policy discussion on Capitol Hill with Cammack to examine these structural problems and the need for comprehensive reform. The App Store Freedom Act reflects the kind of targeted, root-cause solution the discussion highlighted. 

Apple argues that privacy and security require the App Store to remain the exclusive clearinghouse for iPhone apps. That justification does not hold up under scrutiny. MacBook users can download software directly from the web without going through any app store. The same purported privacy and security concerns would apply there, yet Apple imposes no such restriction. What distinguishes the iPhone is not its security needs, it is the App Store’s estimated tens-of-billions-of-dollars annual cash flow. 

This debate is not about punishing success. Apple makes great products and has earned its place in the market. However, antitrust law has never permitted a company to leverage its dominance to foreclose competition, regardless of how popular its products are. Markets function best when companies succeed because they offer superior goods and services, not because they control the only gate through which competitors must pass. 

Congress should pass the App Store Freedom Act. It addresses the structural bottleneck that allows many of these problems to persist. When genuine competition is restored in app distribution, incentives will shift. Fees will come down, interoperability will improve, safety protections will strengthen, and innovation will accelerate.

Every member of Congress committed to free markets, consumer protection and the rule of law should support it. Addressing the root cause is the surest way to ensure that the digital economy works for consumers, developers and families — not just for Apple. 

Jordan Sekulow is the executive director for the American Center for Law and Justice. Brandon Kressin is the director of the Coalition for a Competitive Mobile Experience. They wrote this for InsideSources.com. Please submit comments at yourvalley.net/letters or email them to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.