Apple and Google have signed a contract to roll out a set of reforms to their operations in the United Kingdom app stores in response to increasing regulatory pressure to make the digital market place more transparent, predictable and fair to developers. Britain’s Competition and Markets Authority has been increasingly scrutinizing it, indicating that it may now take a more stringent approach to the power that large technology platforms possess, which determine the way apps are developed, discussed, ranked, and monetized.
Apple App Store and Google Play Store have served as the main gateways between developers of the apps and the smartphone users throughout the years. Practically, it implies that when an enterprise is looking to target consumers in mobile gadgets in UK, it is virtually bound to follow the regulations of these two companies. This is the kind of relationship which has been termed by developers as necessary but frustrating, in terms of unclear review, abrupt change in policies, and the feeling that at times the platforms are not only referees but also competitors.
The participation of the CMA signifies a change in the informal regulation to a more interventionist mode. Last year, in October, the regulator declared Apple and Google as having a strategic market position in the smartphone market, which is a status that indicates the magnitude of their influence and provides the authority with new abilities to seek specific changes. This is not the title given to this designation merely symbolically. It enables the CMA to mandate certain undertaking under circumstances where it feels that competition or innovation is being damaged by market forces.
Both companies under the new announced commitments have decided to be more transparent and consistent in their app store processes. The review and ranking of apps is another promise of the utmost importance. The mutual criticism of developers has been that rejections can seem arbitrary, the reasons provided can be very sparse, and there is no real chance to make any meaningful appeal. According to the CMA Apple and Google will now guarantee that their review systems are just and that they communicate better and have less uncertainty. It is this predictability that can spell the difference between a feasible business and months of stunted growth to small developers specifically.
Another major area is the data. During the process of submitting the apps and updating them, app developers regularly provide sensitive commercial data to platform owners. It has been always feared that this information may be utilized to the advantage of rival services operated by the same corporations that were in charge of the app stores. In their undertakings, Apple and Google have stipulated that they will ensure that there exist security measures to soothe developer information to prevent the fears that the information acquired in the app store will be misused to harm an independent enterprise.
Apple has also compromised significantly concerning access to its iOS features. The developers will be able to seek wider access to some of the capabilities of the system to allow them to create products that will compete more closely with the services provided by Apple. This is in the form of digital wallets and live translation where the native applications at Apple have historically been more integrated with the operating system. The change may provide a new opportunity to more creative and competitive alternatives to the developers who have been left locked out of these features.
In a larger sense, these developments represent a regulatory philosophy that is more permissive and less focused on prolonged lawsuits. The CMA has talked about the agreement as a significant initial move under its stricter regime indicating that they view cooperation as a means of providing faster outcomes to the market. One gets a feeling that regulators now understand what not to do based on past events whereby the investigations took years of time to complete as market conditions kept on changing.
With that said, the commitments do not go as far as to cover the issue that many developers regard as the most urgent one, which is commissions. Apple and Google are still making a profit off of app purchases and subscriptions and in-app purchases at a large percentage of each transaction. These commissions are an ever present source of tension to some developers, particularly those who work on thin margins. Although the CMA has ensured that it will remain involved in business with both firms on commissions and other forms of payment, no specific modifications have been made to such an aspect in the present agreement.
This is what has caused mixed feelings in the developer community. On the one hand, the availability of platform features, more equitable reviews, and enhanced transparency is a tangible benefit that might enhance day-to-day operations. Conversely, most companies are claiming that as long as there is no change in commission structures, the balance of power will continue to be greatly skewed towards platform owners. They say, the cost of doing business on mobile is still high.
On the part of Apple and Google, the deal gives the two companies an opportunity to showcase collaboration without an essential change in the business model. The two firms have always contended that their policies in the app store are meant to protect consumers, guarantee their security as well as a high quality ecosystem. They can offer themselves as responsive to concerns without having to make drastic overhauls to their platforms by accepting specific reforms instead of wholesale change.
The regulators in other areas are also keeping an eye on the practice of the UK. Governments around the world are struggling with how best they can deal with the power of large technology companies without crushing the innovations. The way CMA employed the concept of strategic market status and negotiated commitments may serve as the prototype in other regimes that need to find speedier and approachable ways of resolving cases instead of applying antitrust regulations.
To developers dealing inside the Apple and Google ecosystems, the true trial will be in the implementation of these promises. Paper policies are not necessarily converted into a change in practice. Clear instructions, uniform implementation and easy channels of appeal will not only be important as the headline promises. In the case of the reforms resulting in a less bumpy ride of approvals on apps and a more equal playing field, it may restore part of the confidence that has been lost over the years.
Simultaneously, there are concerns regarding the effect of competition in the long term. The more iOS features one can access, the more innovation it can prompt, yet it also relies on the speed and impartiality with which such demands can be processed. In the same vein, transparency on rankings and review will only work when the developers feel that the system is indeed treating all apps equally, the owner of the apps notwithstanding.
